Franklin Training Services (FTS) 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 FTS incurs is instructor salaries; it pays instructors $5,300 per course taught. FTS recently agreed to offer a course of instruction to the employees of Novak Incorporated at a price of $470 per student. Novak estimated that 20 students would attend the course. Base your answers on the preceding information. Problem 11-25A (Algo) Part 1 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 (i.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 18 students). What is the percentage change in profitability?

Franklin Training Services (FTS) 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 FTS incurs is instructor salaries; it pays instructors $5,300 per course taught. FTS recently agreed to offer a course of instruction to the employees of Novak Incorporated at a price of $470 per student. Novak estimated that 20 students would attend the course. Base your answers on the preceding information. Problem 11-25A (Algo) Part 1 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 (i.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 18 students). What is the percentage change in profitability?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5E: Identify fixed and variable costs Intuit Inc. (INTU) develops and sells software products for the...

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ework i [The following information applies to the questions displayed below.] Franklin Training Services (FTS) 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 FTS incurs is instructor salaries; it pays instructors $5,300 per course taught. FTS recently agreed to offer a course of instruction to the employees of Novak Incorporated at a price of $470 per student. Novak estimated that 20 students would attend the course. Base your answers on the preceding information. Problem 11-25A (Algo) Part 3 FTS sells a custom wood plaque to students who complete the training course. Due to the custom nature of these plaques, FTS has to produce them in advance based on the estimated number of students to be enrolled in the course. Any plaques made for students who do not end up completing the course will be discarded. Prior to the first class, FTS pre-ordered 20…
2 Problem 11-25A (Algo) Effects of operating leverage on profitability LO 11-1, 11-2 [The following information applies to the questions displayed below.] Franklin Training Services (FTS) 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 FTS incurs is instructor salaries; it pays instructors $5,300 per course taught. FTS recently agreed to offer a course of instruction to the employees of Novak Incorporated at a price of $470 per student. Novak estimated that 20 students would attend the course. Base your answers on the preceding information. Problem 11-25A (Algo) Part 2 The instructor has offered to teach the course for a percentage of tuition fees. Specifically, she wants $250 per person attending the class. Assume that the tuition fee remains at $470 per student. f. Is the cost of instruction a fixed or a variable cost? g. Determine the profit,…
Required Information [The following information applies to the questions displayed below.] Benson Training Services (BTS) 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 BTS Incurs Is Instructor salaries; it pays Instructors $5,700 per course taught. BTS recently agreed to offer a course of instruction to the employees of Novak Incorporated at a price of $410 per student. Novak estimated that 20 students would attend the course. Base your answers on the preceding Information. 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 (I.e., enrollment increases to 22 students). What is the percentage change in profitability? d. Determine the…
Required information [The following information applies to the questions displayed below.) Check my work Franklin Training Services (FTS) 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 FTS incurs is instructor salaries; it pays instructors $6,000 per course taught. FTS recently agreed to offer a course of instruction to the employees of Novak Incorporated at a price of $700 per student Novak estimated that 20 students would attend the course. Base your answers on the preceding information. FTS sells a custom wood plaque to students who complete the training course. Due to the custom nature of these plaques, FTS has to produce them in advance based on the estimated number of students to be enrolled in the course. Any plaques made for students who do not end up completing the course will be discarded. Prior to the first class, FTS pre-ordered 20…
! Required information [The following information applies to the questions displayed below.] Franklin Training Services (FTS) 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 FTS incurs is instructor salaries; it pays instructors $6,000 per course taught. FTS recently agreed to offer a course of instruction to the employees of Novak Incorporated at a price of $700 per student. Novak estimated that 20 students would attend the course. Base your answers on the preceding information. 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 (i.e., enrollment increases to 22 students). What is the percentage change in profitability? d. Determine the…
Required Information [The following information applies to the questions displayed below.] UR Safe Systems Installs home security systems. Two of its systems, the ICU 100 and the ICU 900, have these characteristics: Design Specifications Video cameras Video monitors Motion detectors Floodlights Alarms Wiring Installation 1,050 feet 21 hour The ICU 100 sells for $860 Installed, and the ICU 900 sells for $1,570 Installed. 1. Current profit margin 2. ICU 100 2 2 3 1 5 650 feet 11 hour Required: 1. What are the current gross profit margin percentages on both systems? 2. UR Safe's management believes that it must drop the price on the ICU 100 to $800 and on the ICU 900 to $1,440 to remain competitive in the market. Recalculate gross profit margin percentages for both products at these price levels and then compute the target cost needed for each product to maintain the current gross profit margin percentages. Profit margin Target cost (For all requirements, round your percentage answers to…
Required information [The following information applies to the questions displayed below] Nation's Capital Fitness, Inc., operates a chain of fitness centers in the Washington, D.C., area. The firm's controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm's equipment maintenance costs must be determined. The accounting staff has suggested the use of the high-low method to develop an equation, in the form of Y=a+bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows: Month January February March April May June July August September October November December Total Average "Rounded Hours of Maintenance Service 530 470 260 470 360 450 330 450 470 380 360 360 4,890 408- Maintenance Costs $ 5,068 4,220 2,800 4,330 2,970 4,140 3,100 3,510 4,010 3,200 3,250 3,040 $43,638 $ 3,637 Required: 1. Using the high-low method of cost estimation, estimate the behavior of the…
Problem 17-2 (LO 17-1) A service company has the... A service company has the following financial information (in millions of $) Sales $510 210 Cost of outsourced facilitating goods Cost of in-house services provided Administrative costs 199 77 Pretax earnings 24 (Round answers to 1 decimal place.) a. What is the profit leverage effect of reducing the cost of the facilitating goods in this company? b. It has been suggested that the in-house services costs could be reduced by 10 percent in the coming year by implementing lean systems. What effect would this have on earnings increase in percentage? c. What is the profit leverage effect of in-house services relative to profits?
Can I please get help with this question? [The following information applies to the questions displayed below.] Franklin Training Services (FTS) 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 FTS incurs is instructor salaries; it pays instructors $6,000 per course taught. FTS recently agreed to offer a course of instruction to the employees of Novak Incorporated at a price of $700 per student. Novak estimated that 20 students would attend the course. Base your answers on the preceding information. Required Relative to the number of students in a single course, is the cost of instruction a fixed or a variable cost? Determine the profit, assuming that 20 students attend the course. Determine the profit, assuming a 10 percent increase in enrollment (i.e., enrollment increases to 22 students). What is the percentage change in…
A consulting company has two departments, Corporate and Government. Conputer support is common to both departments. The cost of computer support is $9 million. Gigabytes Storage # of Consultants corporate 97,500 135 Government 52,500 165 Most of the business in the Corporate Department is priced on a fixed fee basis, while most of the Government Department is priced on a cost-plus fixed fee basis.Will this affect the choice of the allocation base?Should it?
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