Question

15 Required information [The following information applies to the questions displayed below Part 1 of 3 Adams Training Services (ATS) 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 ATS incurs is instructor salaries; it pays instructors $5,300 per course taught. ATS recently agreed to offer a course of instruction to the employees of Novak Incorporated at a price of $420 per student. Novak estimated that 20 students would attend the course Skipped Base your answers on the preceding information. еВok 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 (l.e., enrollment increases to 22 students). What is the percentage change in profitability? d. 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 A Required C Required B Required D Relative to the number of students in a single course, is the cost of instruction a fixed or a variable cost? The cost of instruction is a

Answer 1

fc A Ex AB D E F G H A the cost of instruction is a Fixed Cost Reason - because it won't change with the change in number of students. sales revenue less: cost of instruction Profit $ $ $ 8,400 -5,300 3,100 C sales revenue less: cost of instruction Profit $ $ $ 9,240 -5,300 3,940 change in profitability 27.10% sales revenue less: cost of instruction Profit $ $ $ 7,560 -5,300 2,260 change in profitability -27.10%

for formulas and calculations, refer to the image below -

| x fc A ДА В с р E F G H A the cost of instruction is a Fixed Cost Reason-because it won't change with the change in number of students. sales revenue less: cost of instruction Profit =20*420 -5300 =D5+D6 sales revenue less: cost of instruction Profit =22*420 |-5300 =D9+D10 change in profitability =(D11-07)/D7 less: cost of instruction Profit 1=18*420 1-5300 =D15+D16 change in profitability =(D17-D7)/D7