How were the following answers received from the given requirements?
I Requirements 1. Compute the following using cost information from year 2012-2013 operations: Fixed cost per year Variable cost per student-month 2. Suppose that in 2013-2014 Imagine That School decreased its use of GMC to 90 students (that is, 810 student-months). The fixed contract price of $150,000 was still paid. If everything else stayed as it was in 2012-2013, what profit or loss would be made in 2013-2014? 3. Suppose that at the beginning of 2013-2014 Imagine That School decided not to renew its contract with GMC, and the management of GMC decided to try to maintain business as usual with only private students. How many students (each signing up for 9 months) would GMC require to continue to make a profit of $1,000 per year? Data Table Revenues: Imagine That School Contract $ 150,000 120,000 Private students Total revenues $ 270,000 Expenses: Administrative staff $ 64,000 Teaching staff 100,000 Facilities 51,000 54,000 Supplies 269,000 Total expenses $ 1,000 Profit Gottschalk Music Center Company (GMC) provides instrumental music education to children of all ages. Payment for services comes from two sources: (1) a contract with Imagine That School to provide private music lessons for up to 140 band students a year (where a year is 9 months of education) for a fixed fee of $150,000, and (2) payment from individuals at a rate of $120 per month for 9 months of education each year. In the 2012-2013 school year, GMC made a profit of $1,000 on revenues of $270,000: Click the icon to view the data.) GMC conducted an activity analysis and found that teaching staff wages and supplies costs are variable with respect to student-months. (A student-month is one student educated for 1 month.) Administrative staff and facilities costs are fixed within the range of 1,800-2,300 student-months. At volumes between 2,300 and 2,800 student-months, an additional facilities charge of $2,800 would be incurred. During the last year, a total of 2,200 student-months of education were provided, 1,000 of which were for private students and 1,200 of which were offered under the contract with Imagine That School. Read the requirements Fixed cost per year amount to $ 115000 Variable cost per student-month amount to $ 70 Requirement Suppose that in 2013-2014 Imagine That School decreased its use of GMC to 90 students (that is, 310 student-months). The fixed contract price of $150,000 was still paid. If everything else stayed as it was in 2012-2013, what profit or loss would be made in 2013-2014? Complete the table below to calculate the profit or loss for 2013-2014 assuming that Imagine That School decreased its use of GMC to 90 students (that is, 810 student-months) but that everything else stayed the same from 2012-2013. Total revenues $ 270,000 126.700 Variable costs Total contribution margin Fixed costs 143,300 115,000 28,300 Profit (Loss) Requirement 3. Suppose that at the beginning of 2013-2014 Imagine That School decided not to renew its contract with GMC, and the management of GMC decided to try to maintain business as usual with only private students. How many students (each signing up for 9 months) would GMC require to continue to make a profit of $1,000 per year? (Round the required number of students up to the next whole number.) GMC would require 264 students to continue to make a profit of $1,000 per year
