Question
You run a school in Florida. Fixed monthly cost is $5,401.00 for rent and utilities, $6,244.00 is spent in salaries and $1,405.00 in insurance. Also
You run a school in Florida. Fixed monthly cost is $5,401.00 for rent and utilities, $6,244.00 is spent in salaries and $1,405.00 in insurance. Also every student adds up to $96.00 per month in stationary, food etc. You charge $665.00 per month from every student now. You are considering moving the school to another neighborhood where the rent and utilities will increase to $10,899.00, salaries to $6,764.00 and insurance to $2,433.00 per month. Variable cost per student will increase up to $153.00 per month. However you can charge $1,196.00 per student. At what point will you be indifferent between your current mode of operation and the new option?
For a table manufacturing company, selling price for a table is $177.00 per Unit, Variable cost is $29.00 per Unit, rent is $3,391.00 per month and insurance is $288.00 per month. Company wants to expand its business and improve the table quality, it wants to increase the selling price for a table to $318.00 per Unit, Variable cost to $57.00 per Unit, bigger area will have rent $5,972.00 per month and insurance is $400.00 per month At what point will the company be indifferent between the current mode of operation and the new option?
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