Orlando and Diego Universities offer executive training courses to corporate cli

Question

Orlando and Diego Universities offer executive training courses to corporate clients. Orlando pays its instructors $6,622 per course taught. Diego pays its instructors $301 per student enrolled in the class. Both universities charge executives a $347 tuition fee per course attended.

Prepare income statements for Orlando and Diego, assuming that 22 students attend a course.

Orlando University embarks on a strategy to entice students from Diego University by lowering its tuition to $227 per course. Prepare an income statement for Orlando assuming that the university is successful and enrolls 38 students in its course.

Diego University embarks on a strategy to entice students from Orlando University by lowering its tuition to $227 per course. Prepare an income statement for Diego, assuming that the university is successful and enrolls 38 students in its course.

Prepare income statements for Orlando and Diego Universities, assuming that 13 students attend a course, and assuming that both universities charge executives a $347 tuition fee per course attended.

Orlando and Diego Universities offer executive training courses to corporate clients. Orlando pays its instructors $6,622 per course taught. Diego pays its instructors $301 per student enrolled in the class. Both universities charge executives a $347 tuition fee per course attended.

Prepare income statements for Orlando and Diego, assuming that 22 students attend a course.

Orlando University embarks on a strategy to entice students from Diego University by lowering its tuition to $227 per course. Prepare an income statement for Orlando assuming that the university is successful and enrolls 38 students in its course.

Diego University embarks on a strategy to entice students from Orlando University by lowering its tuition to $227 per course. Prepare an income statement for Diego, assuming that the university is successful and enrolls 38 students in its course.

Prepare income statements for Orlando and Diego Universities, assuming that 13 students attend a course, and assuming that both universities charge executives a $347 tuition fee per course attended.

Explanation / Answer

Part A)

The income statements are given below:

For 22, students, both the universities will earn the same level of income of $1,012.

__________

Part B)

The university will be able to increase its profits to $2,004 at a tution fee of $227 with more students, as it pays a fixed charge of $6,622 to its instructors.

__________

Part C)

The university will suffer a loss if it reduces the tution fee below the instructor fee per student. In the given situation, the amount of loss will be $2,812.

__________

Part D)

With a reduction in the number of students, Orlando university will suffer a loss, as it pays a fixed charge of $6,622 irrespective of the number of students. On the other hand, Diego university will earn profit as it pays fee to its instructors on a per student basis. However, its profits will be lower because of lesser students.

Orlando University Diego University Total Course/Tution Fee (22*347) 7,634 7,634 Less Instructor Fee (Fixed) 6,622 0 Instructor Fee (Variable) [22*301] 0 6,622 Net Income/(Loss) $1,012 $1,012

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