FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Required Information
[The following information applies to the questions displayed below.]
Benson Training Services (BTS) 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 BTS Incurs Is Instructor
salaries; it pays Instructors $5,700 per course taught. BTS recently agreed to offer a course of instruction to the
employees of Novak Incorporated at a price of $410 per student. Novak estimated that 20 students would attend the
course.
Base your answers on the preceding Information.
Required
a. Relative to the number of students in a single course, is the cost of instruction a fixed or a variable cost?
b. Determine the profit, assuming that 20 students attend the course.
c. Determine the profit, assuming a 10 percent increase in enrollment (I.e., enrollment increases to 22 students). What is the
percentage change in profitability?
d. Determine the profit, assuming a 10 percent decrease in enrollment (1.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 A
Required B Required C
Determine the profit, assuming a 10 percent decrease in enrollment (i.e., enrollment decreases to 18 students). What is the
percentage change in profitability?
Note: Round your percentage answer to 2 decimal places. Negative amount should be indicated with a minus sign.
Profit
Change in profitability
$
1,680
Required D
96
< Required C
Required D >
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Transcribed Image Text:Required Information [The following information applies to the questions displayed below.] Benson Training Services (BTS) 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 BTS Incurs Is Instructor salaries; it pays Instructors $5,700 per course taught. BTS recently agreed to offer a course of instruction to the employees of Novak Incorporated at a price of $410 per student. Novak estimated that 20 students would attend the course. Base your answers on the preceding Information. Required a. Relative to the number of students in a single course, is the cost of instruction a fixed or a variable cost? b. Determine the profit, assuming that 20 students attend the course. c. Determine the profit, assuming a 10 percent increase in enrollment (I.e., enrollment increases to 22 students). What is the percentage change in profitability? d. Determine the profit, assuming a 10 percent decrease in enrollment (1.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 A Required B Required C Determine the profit, assuming a 10 percent decrease in enrollment (i.e., enrollment decreases to 18 students). What is the percentage change in profitability? Note: Round your percentage answer to 2 decimal places. Negative amount should be indicated with a minus sign. Profit Change in profitability $ 1,680 Required D 96 < Required C Required D >
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