Problem 113 Algorithmic Micromedia offers computer training

Problem 1-13 (Algorithmic)

Micromedia offers computer training seminars on a variety of topics. In the seminars each student works at a personal computer, practicing the particular activity that the instructor is presenting. Micromedia is currently planning a two-day seminar on the use of Microsoft Excel in statistical analysis. The projected fee for the seminar is $500 per student. The cost for the conference room, instructor compensation, lab assistants, and promotion is $9300. Micromedia rents computers for its seminars at a cost of $50 per computer per day.

Develop a model for the total cost to put on the seminar. Let x represent the number of students who enroll in the seminar.

Model for total cost =  + x

Develop a model for the total profit if x students enroll in the seminar. For subtractive or negative number use a minus sign even if there is a + sign before the blank. (Example: -300)

Model for total profit = x +

Micromedia has forecasted an enrollment of 30 students for the seminar. How much profit will be earned if its forecast is accurate?

Profit = $

Compute the breakeven point. If needed, round your answer to the nearest integer.

Breakeven point =  students

Solution

a)Develop a model for the total cost to put on the seminar. Let x represent the number of students who enroll in the seminar.

Model for total cost = x(500) +9300

b)Develop a model for the total profit if x students enroll in the seminar. For subtractive or negative number use a minus sign even if there is a + sign before the blank. (Example: -300)

Model for total profit = x(500) +9300 -50x

c)Micromedia has forecasted an enrollment of 30 students for the seminar. How much profit will be earned if its forecast is accurate?

Profit = 450*30 -9000 =>4500

d) break even point = fixed cost/contribution margin

=>x(500) +9300 /x(500) +9300 -50x