Question
Elite Tutors offers private tutoring sessions. Each session lasts 2 hours. The company anticipates 2,000 sessions annually. They have invested $1,200,000 in their facilities and
Elite Tutors offers private tutoring sessions. Each session lasts 2 hours. The company anticipates 2,000 sessions annually. They have invested $1,200,000 in their facilities and aim for an ROI of 20%. The budgeted costs for the coming year are shown below:
| Cost Item | Per Session ($) | Total ($) |
|---|---|---|
| Direct Materials (Books, etc.) | 5 | 10,000 |
| Direct Labor (Tutors) | 40 | 80,000 |
| Variable Overhead | 10 | 20,000 |
| Fixed Overhead | - | 200,000 |
| Variable Selling & Admin Expenses | 5 | 10,000 |
| Fixed Selling & Admin Expenses | - | 100,000 |
Required:
- Calculate the total cost per session.
- Determine the desired ROI per session.
- Compute the target price per session.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Accounting
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
2nd Edition
0078110823, 9780078110825
