Rooney Training Services (RTS) provides instruction on the use of computer software for the employees of its corporate clients. It offers courses in the clients' offices on the clients' equipment. The only major expense RTS incurs is instructor salaries; it pays instructors $5,800 per course taught. RTS recently agreed to offer a course of instruction to the employees of Novak Incorporated at a price of $490 per student. Novak estimated that 20 students would attend the course. Base your answers on the preceding information. The instructor has offered to teach the course for a percentage of tuition fees. Specifically, she wants $220 per person attending the class. Assume that the tuition fee remains at $490 per student. f. Is the cost of instruction a fixed or a variable cost? g. Determine the profit, assuming that 20 students take the course. h. Determine the profit, assuming a 10 percent increase in enrollment (i.e., enrollment increases to 22 students). What is the percentage change in profitability? i. Determine the profit, assuming a 10 percent decrease in enrollment (i.e., enrollment decreases to 18 students). What is the percentage change in profitability? Complete this question by entering your answers in the tabs below. Required F Required G Profit Required H Required I Determine the profit, assuming that 20 students take the course.
Rooney Training Services (RTS) provides instruction on the use of computer software for the employees of its corporate clients. It offers courses in the clients' offices on the clients' equipment. The only major expense RTS incurs is instructor salaries; it pays instructors $5,800 per course taught. RTS recently agreed to offer a course of instruction to the employees of Novak Incorporated at a price of $490 per student. Novak estimated that 20 students would attend the course. Base your answers on the preceding information. The instructor has offered to teach the course for a percentage of tuition fees. Specifically, she wants $220 per person attending the class. Assume that the tuition fee remains at $490 per student. f. Is the cost of instruction a fixed or a variable cost? g. Determine the profit, assuming that 20 students take the course. h. Determine the profit, assuming a 10 percent increase in enrollment (i.e., enrollment increases to 22 students). What is the percentage change in profitability? i. Determine the profit, assuming a 10 percent decrease in enrollment (i.e., enrollment decreases to 18 students). What is the percentage change in profitability? Complete this question by entering your answers in the tabs below. Required F Required G Profit Required H Required I Determine the profit, assuming that 20 students take the course.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Rooney Training Services (RTS) provides instruction on the use of computer software for the
employees of its corporate clients. It offers courses in the clients' offices on the clients'
equipment. The only major expense RTS incurs is instructor salaries; it pays instructors $5,800
per course taught. RTS recently agreed to offer a course of instruction to the employees of Novak
Incorporated at a price of $490 per student. Novak estimated that 20 students would attend the
course.
Base your answers on the preceding information.
The instructor has offered to teach the course for a percentage of tuition fees. Specifically, she wants $220 per
person attending the class. Assume that the tuition fee remains at $490 per student.
f. Is the cost of instruction a fixed or a variable cost?
g. Determine the profit, assuming that 20 students take the course.
h. Determine the profit, assuming a 10 percent increase in enrollment (i.e., enrollment increases to 22 students).
What is the percentage change in profitability?
i. Determine the profit, assuming a 10 percent decrease in enrollment (i.e., enrollment decreases to 18 students).
What is the percentage change in profitability?
Complete this question by entering your answers in the tabs below.
Required F Required G
Profit
Required H Required I
Determine the profit, assuming that 20 students take the course.
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