Question
Alameda Tile sells products to many people remodeling their homes and thinks that it could profitably offer courses on tile installation, which might also increase
Alameda Tile sells products to many people remodeling their homes and thinks that it could profitably offer courses on tile installation, which might also increase the demand for its products. The basic installation course has the following (tentative) price and cost characteristics. Tuition $ 520 per student Variable costs (tiles, supplies, and so on) 290 per student Fixed costs (advertising, salaries, and so on) 103,500 per year Required: a. What enrollment will enable Alameda Tile to break even? b. How many students will enable Alameda Tile to make an operating profit of $59,800 for the year? c. Assume that the projected enrollment for the year is 890 students for each of the following (considered independently): 1. What will be the operating profit (for 890 students)? 2. What would be the operating profit if the tuition per student (that is, sales price) decreased by 7 percent? Increased by 21 percent? 3. What would be the operating profit if variable costs per student decreased by 13 percent? Increased by 20 percent? 4. Suppose that fixed costs for the year are 7 percent lower than projected, whereas variable costs per student are 7 percent higher than projected. What would be the operating profit for the year?
Alameda Tile sells products to many people remodeling their homes and thinks that it could profitably offer courses on tile installation, which might also increase the demand for its products. The basic installation course has the following (tentative) price and cost characteristics. Tuition Variable costs (tiles, supplies, and so on) Fixed costs (advertising, salaries, and so on) $ 520 per student 290 per student 103,500 per year Required: a. What enrollment will enable Alameda Tile to break even? b. How many students will enable Alameda Tile to make an operating profit of $59,800 for the year? c. Assume that the projected enrollment for the year is 890 students for each of the following (considered independently): 1. What will be the operating profit (for 890 students)? 2. What would be the operating profit if the tuition per student (that is, sales price) decreased by 7 percent? Increased by 21 percent? 3. What would be the operating profit if variable costs per student decreased by 13 percent? Increased by 20 percent? 4. Suppose that fixed costs for the year are 7 percent lower than projected, whereas variable costs per student are 7 percent higher than projected. What would be the operating profit for the year? Complete this question by entering your answers in the tabs below. Reg A Req B Req C1 Req C2 Reg C3 Req C4 What enrollment will enable Alameda Tile to break even? Break-even point students Complete this question by entering your answers in the tabs below. Req A Reg B Req C1 Req C2 Req C3 Req C4 How many students will enable Alameda Tile to make an operating profit of $59,800 for the year? Number of students Req A Req B Reg C1 Req C2 Req C3 Req C4 Assume that the projected enrollment for the year is 890 students for the following (considered independently): C2. What would be the operating profit if the tuition per student (that is, sales price) decreased by 7 percent? Increased by 21 percent? (Do not round intermediate calculations.) Sales price decreased by 7 percent: Sales price increased by 21 percent: Operating profit Operating profit by by Complete this question by entering your answers in the tabs below. Req A Req B Req ci Req C2 Reg C3 Req C4 Assume that the projected enrollment for the year is 890 students for the following (considered independently): C4. Suppose that fixed costs for the year are 7 percent lower than projected, whereas variable costs per student are 7 percent higher than projected. What would be the operating profit for the year? (Do not round intermediate calculations.) Operating profit
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