Peterson Management, Inc., is a small firm that sponsors time-management seminars in hotels throughout the country. It sponsors 20 two-day seminars during the year for a tuition fee of $250 per student. The following is a budget for a single seminar:

Peterson Management, Inc.

Budget per Seminar

Expected enrollment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Tuition per person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . × $250

Revenue per seminar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$10,000

Variable costs:

Catering ($25 per person) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 1,000

Books and handouts ($12 per person) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480

Fixed costs:

Airfare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500

Hotel rental fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600

Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .950

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .300

Total costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 3,830

Expected income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 6,170

Required:

Bruce Peterson, owner of the company and the speaker at the seminars, would be pleased with an income of $6,170 per seminar. With 20 seminars per year, the company’s annual income would be $123,400. He is concerned, however, that every seminar may not have 40 participants. Prepare a flexible budget showing what annual income would be if 10, 20, 40, or 50 people enroll in each seminar.