Question

Kenton and Denton Universities offer executive training courses to corporate clients. Kenton pays its instructors $6,279 per course taught. Denton pays its instructors $299 per student enrolled in the class. Both universities charge executives a $348 tuition fee per course attended.

Required

1. Prepare income statements for Kenton and Denton, assuming that 21 students attend a course.

2. Kenton University embarks on a strategy to entice students from Denton University by lowering its tuition to $228 per course. Prepare an income statement for Kenton assuming that the university is successful and enrolls 42 students in its course.

3. Denton University embarks on a strategy to entice students from Kenton University by lowering its tuition to $228 per course. Prepare an income statement for Denton, assuming that the university is successful and enrolls 42 students in its course.

5. Prepare income statements for Kenton and Denton Universities, assuming that 15 students attend a course, and assuming that both universities charge executives a $348 tuition fee per course attended.

Answer 1

Part-A: Income Statement
	Kenton	Denton
Tuition fee (21 student X$348)	$7,308	$7,308
Less; cost of instructor	($6,279)	($6,279)
Net Income	$1,029	$1,029

Part-B Income Statement
	Kenton
Tuition fee (42*228)	$9,576
Less; cost of instructor	$6,279
Net income	$3,297
Part-C Income Statement
	Denton
Tuition fee (42*228)	$9,576
Less; cost of instructor (42*299)	$12,558
Net loss	($2,982)

Part-D: Income Statement
	Kenton	Denton
Tuition fee (15*348)	$5,220	$5,220
Less; cost of instructor K;-$6279, D:- (15*299)	($6,279)	($4,485)
Net income (loss)	($1,059)	$735

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