Question
Q5: BEST is an educational tutoring centre. This centre offers private training courses in Photoshop, Video Editing, and Coding. Information about the tutoring sessions is
Q5: BEST is an educational tutoring centre. This centre offers private training courses in Photoshop, Video Editing, and Coding. Information about the tutoring sessions is as follows:
Photoshop | Video Editing | Coding | |
Price per session | $ 15 | $ 25 | $ 35 |
Variable labour cost | 8 | 14 | 18 |
Variable supplies costs | 4 | 5 | 6 |
Time per session | 30 min. | 45 min. | 60 min. |
Demand per week | 80 sessions | 100 sessions | 70 sessions |
The training centre currently has enough trainers to provide only 165 hours of training each week.
Required a. Can BEST satisfy customer demand with her current supply of training hours? Why or why not? b . How should BEST allocate the currently available training hours? C. What total contribution margin will BEST earn based on your answer to (b)? D. The accountant of the centre suggested that the company raise the sales price on the Video Editing course to $30 to reduce customer demand. The accountant believes that at the higher price, demand for the video editing will drop to 80 sessions. How should the accountant allocate the 165 training hours based on this new information? What total contribution margin will BEST earn? e- After hearing about the accountants recommendation to increase the video editing price to $30, the sales manager, suggested that the company raise the price of the photoshop course instead. He believes that if the price is increased to $18, demand will fall to 60 units. How should the accountant allocate the 165 training hours under the sales managers proposal? What total contribution margin will BEST earn? f- Based on your answers to parts (c), (d), and (e), which action do you suggest that BEST take? Why?
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