is about total cost, variable cost, fixed cost and, break-even point.

Question

Jimbo Elrod has obtained fixed and variable cost information for four potential locations for his professional wrestling school and summarized it in tabular form below. All values are in dollars.

Site Fixed Cost Variable Cost

A         10,000            24

B         12,000            20

C         14,000            18

D         16,000            17

 

a) Jimbo plans to charge the same amount for tuition regardless of where he decides to establish his school. If he believes that 700 students will matriculate each year, which location will result n the lowest total cost? (4 points)

b) What is the break-even point for each location if Jimbo decides to charge $21 per student? (5points)

Answer 1

location a will result n the lowest total cost