Question
You run a school in Florida. Fixed monthly cost is $5,254.00 for rent and utilities, $5,834.00 is spent in salaries and $1,034.00 in insurance. Also
You run a school in Florida. Fixed monthly cost is $5,254.00 for rent and utilities, $5,834.00 is spent in salaries and $1,034.00 in insurance. Also every student adds up to $100.00 per month in stationary, food etc. You charge $697.00 per month from every student now.You are considering moving the school to another neighborhood where the rent and utilities will increase to $11,153.00, salaries to $6,174.00 and insurance to $2,159.00 per month. Variable cost per student will increase up to $188.00 per month. However you can charge $1,044.00 per student. At what point will you be indifferent between your current mode of operation and the new option?
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