The Willy Bunker School of Karate has annual fixed operatingcosts of Rs.4,000. E

Question

The Willy Bunker School of Karate has annual fixed operatingcosts of Rs.4,000. Each

student pays Rs.200 in fees; Rs.40 of this amount covers the perstudent cost of

instructional hand-outs and supplies. There are no otheroperating costs.

i. How many students must the school enroll in order tobreak even?

ii. Determine the break-even point if the cost of instructional materials were toincrease to Rs.50 per student.

iii. Ignoring part b above, what would be the break-evenpoint if fees were to increase

by 20 percent?

iv. Ignoring parts b and c above, what would be thebreak-even point if fixed costs

were reduced to $21,280?

v. Calculate the break-even point if all the above changes(b, c, and d) were to take

Explanation / Answer

i. from the above values 4000+40*x=200*x so x= 25 break even point is 25 students II from the above values 4000+50*x=200*x so x= 26.6 break even point is 27 students II from the above values 4000+50*x=200*x so x= 26.6 break even point is 27 students

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