Kenton and Denton Universities offer executive training courses to corporate clients. Kenton pays its instructors $5,000 per course taught. Denton pays its instructors $250 per
Kenton and Denton Universities offer executive training courses to corporate clients. Kenton pays its instructors $5,000 per course taught. Denton pays its instructors $250 per student enrolled in the class.
Both universities charge executives a $450 tuition fee per course attended.
Required
a. Prepare income statements for Kenton and Denton, assuming that 20 students attend a course.
b. Kenton University embarks on a strategy to entice students from Denton by lowering its tuition to $240 per course. Prepare an income statement for Kenton, assuming that the university is successful and enrolls 40 students in its course.
c. Denton University embarks on a strategy to entice students from Kenton University by lowering its tuition to $240 per course. Prepare an income statement for Denton, assuming that the university is successful and enrolls 40 students in its course.
d. Explain why the strategy described in Requirement b produced a profit but the same strategy described in Requirement c produced a loss.
e. Prepare income statements for Kenton and Denton Universities, assuming that 10 students attend a course, and assuming that both universities charge executives a $450 tuition fee per course attended.
f. It is always better to have fixed rather than variable cost. Explain why this statement is false.
g. It is always better to have variable rather than fixed cost. Explain why this statement is false
Step by Step Solution
3.44 Rating (170 Votes )
There are 3 Steps involved in it
a University Kenton Denton Tuition revenue 20 x 450 9000 9000 Total cost of instruction 5000 20 x 25... View full answer
Get step-by-step solutions from verified subject matter experts
100% Satisfaction Guaranteed-or Get a Refund!
Document Format (1 attachment)
1089-B-M-A-M-A(1663).docx
120 KBs Word File
See step-by-step solutions with expert insights and AI powered tools for academic success
-
Access 30 Million+ textbook solutions.
-
Ask unlimited questions from AI Tutors.
-
Order free textbooks.
-
100% Satisfaction Guaranteed-or Get a Refund!
Claim Your Hoodie Now!
Fundamental Managerial Accounting Concepts
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Olds
8th edition
978-1259569197
Study Smart with AI Flashcards
Access a vast library of flashcards, create your own, and experience a game-changing transformation in how you learn and retain knowledge
Explore Flashcards
Study Help
