Question: You run a school in Florida. Fixed monthly cost is $5,800.00 for rent and utilities, $6,222.00 is spent in salaries and $1,535.00 in insurance. Also

You run a school in Florida. Fixed monthly cost is $5,800.00 for rent and utilities, $6,222.00 is spent in salaries and $1,535.00 in insurance. Also every student adds up to $105.00 per month in stationary, food etc. You charge $750.00 per month from every student now.

You are considering moving the school to another neighborhood where the rent and utilities will increase to $11,243.00, salaries to $6,634.00 and insurance to $2,051.00 per month. Variable cost per student will increase up to $178.00 per month. However you can charge $1,196.00 per student. At what point will you be indifferent between your current mode of operation and the new option?

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