Picard University teaches a large range of undergraduate courses. It is interest

Question

Picard University teaches a large range of undergraduate courses. It is interested in determining the cost equation for the facilities cost as a function of student credit hours so that it an more accurately budget its facilities costs as enrollment grows. Information for the high and low cost semesters and volumes for last 5 years appears below
Semester Student Credit Hours Facilities Cost Spring 2007 250,000 $500,000 Fall 2004 300,000 $530,000
Using the high low method, with student credit hours as the activity driver, what is the equation for facilities cost (TC) as a function of student credit hours? Answer
TC = $2/student credit hour
TC = $1.77/ student credit hour
TC = $350,000 + $0.60/student credit hour
TC = -$585,100 + $1.67/student credit hour Picard University teaches a large range of undergraduate courses. It is interested in determining the cost equation for the facilities cost as a function of student credit hours so that it an more accurately budget its facilities costs as enrollment grows. Information for the high and low cost semesters and volumes for last 5 years appears below
Semester Student Credit Hours Facilities Cost Spring 2007 250,000 $500,000 Fall 2004 300,000 $530,000
Using the high low method, with student credit hours as the activity driver, what is the equation for facilities cost (TC) as a function of student credit hours? TC = $2/student credit hour TC = $1.77/ student credit hour TC = $350,000 + $0.60/student credit hour TC = -$585,100 + $1.67/student credit hour Semester Student Credit Hours Facilities Cost Spring 2007 250,000 $500,000 Fall 2004 300,000 $530,000

Explanation / Answer

TC = $350,000 + $0.60/student credit hour

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