Lakewood University offers executive training courses to corporate clients. It is consider 2 different ways to pay it's instructors:

Option 1: Pay its instructors $5,776 per course taught.

Option 2: Pays its instructors $304 per student enrolled in the class.

The University charge executives a $341 tuition fee per course attended.

Required

1. Prepare a contribution formatted income statement for Lakewood under both options, assuming that 19 students attend a course.

2. Calculate the BEP, MOS and Profit sensitivity multiplier under both options at the 19 student level.

3. Lakewood's course proves to be very popular. Prepare a contribution formatted income statement under both options assuming that the university enrolls 38 students in its course.

4. Assume that one of the major employers in the area recently closed down its company resulting in a drop in number of executives taking the course to 14 students. Prepare contribution margin income statement under both options.