3-a. Assume that because of the small number of sections offered during the Winter Term this year, Professor Morton will have to offer nine sections of Finance 101 during the Fall Term. Compute the expected total cost for Finance 101. 3-b. Can you see any problem with using the cost formula from (2) above to derive this total cost figure?
3-a. Assume that because of the small number of sections offered during the Winter Term this year, Professor Morton will have to offer nine sections of Finance 101 during the Fall Term. Compute the expected total cost for Finance 101. 3-b. Can you see any problem with using the cost formula from (2) above to derive this total cost figure?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![[The following information applies to the questions displayed below.]
Professor John Morton has just been appointed chairperson of the Finance Department at
Westland University. In reviewing the department's cost records, Professor Morton has found the
following total cost associated with Finance 101 over the last five terms:
Term
Fall, last
year
Winter, last
year
Summer, last
year
Fall, this
year
Winter, this
year
Number
of
Sections
Total
Offered Cost
5
$ 6,500
$ 7,000
$ 5,000
3
2
7
4
$13,500
$13,000
Professor Morton knows that there are some variable costs, such as amounts paid to graduate
assistants, associated with the course. He would like to have the variable and fixed costs
separated for planning purposes.
3-a. Assume that because of the small number of sections offered during the Winter Term this year,
Professor Morton will have to offer nine sections of Finance 101 during the Fall Term. Compute the expected
total cost for Finance 101.
3-b. Can you see any problem with using the cost formula from (2) above to derive this total cost figure?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F95a2e371-d4dc-4062-8b7a-9c784a2913e7%2F95e0f0bf-a11f-4df8-8c05-305f624d9d51%2Fpqjg5r_processed.png&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below.]
Professor John Morton has just been appointed chairperson of the Finance Department at
Westland University. In reviewing the department's cost records, Professor Morton has found the
following total cost associated with Finance 101 over the last five terms:
Term
Fall, last
year
Winter, last
year
Summer, last
year
Fall, this
year
Winter, this
year
Number
of
Sections
Total
Offered Cost
5
$ 6,500
$ 7,000
$ 5,000
3
2
7
4
$13,500
$13,000
Professor Morton knows that there are some variable costs, such as amounts paid to graduate
assistants, associated with the course. He would like to have the variable and fixed costs
separated for planning purposes.
3-a. Assume that because of the small number of sections offered during the Winter Term this year,
Professor Morton will have to offer nine sections of Finance 101 during the Fall Term. Compute the expected
total cost for Finance 101.
3-b. Can you see any problem with using the cost formula from (2) above to derive this total cost figure?
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required 3A Required 3B
Assume that because of the small number of sections offered during the Winter Term this year, Professor Morton will have to
offer nine sections of Finance 101 during the Fall Term. Compute the expected total cost for Finance 101. (Round intermediate
calculations and final answers to the nearest whole dollar amount.)
Fixed cost
Variable cost
Total expected cost
X Answer is complete but not entirely correct.
$
$
$
3,040
6,894
9,934
< Required 3A
Required 3B >
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