ONLY ANSWER QUESTIONS 2,3 AND 4 Alameda Tile sells products to many people remodeling their homes and thinks that it could profitably offer courses on tile installation, which might also increase the demand for its products. The basic installation course has the following (tentative) price and cost characteristics. Tuition $ 430 per student Variable costs (tiles, supplies, and so on) 240 per student Fixed costs (advertising, salaries, and so on) 91,200 per year Required: a. What enrollment will enable Alameda Tile to break even? b. How many students will enable Alameda Tile to make an operating profit of $51,300 for the year? c. Assume that the projected enrollment for the year is 840 students for each of the following (considered independently): 1. What will be the operating profit (for 840 students)? 2. What would be the operating profit if the tuition per student (that is, sales price) decreased by 5 percent? Increased by 22 percent? 3. What would be the operating profit if variable costs per student decreased by 14 percent? Increased by 16 percent? 4. Suppose that fixed costs for the year are 9 percent lower than projected, whereas variable costs per student are 8 percent higher than projected. What would be the operating profit for the year?
PLEASE ONLY ANSWER QUESTIONS 2,3 AND 4
Alameda Tile sells products to many people remodeling their homes and thinks that it could profitably offer courses on tile installation, which might also increase the demand for its products. The basic installation course has the following (tentative) price and cost characteristics.
| Tuition | $ | 430 | per student | |
| Variable costs (tiles, supplies, and so on) | 240 | per student | ||
| Fixed costs (advertising, salaries, and so on) | 91,200 | per year | ||
Required:
a. What enrollment will enable Alameda Tile to break even?
b. How many students will enable Alameda Tile to make an operating profit of $51,300 for the year?
c. Assume that the projected enrollment for the year is 840 students for each of the following (considered independently):
1. What will be the operating profit (for 840 students)?
2. What would be the operating profit if the tuition per student (that is, sales price) decreased by 5 percent? Increased by 22 percent?
3. What would be the operating profit if variable costs per student decreased by 14 percent? Increased by 16 percent?
4. Suppose that fixed costs for the year are 9 percent lower than projected, whereas variable costs per student are 8 percent higher than projected. What would be the operating profit for the year?
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