Executive Training, Inc. provides a personal development seminar that is popular
ID: 2606387 • Letter: E
Question
Executive Training, Inc. provides a personal development seminar that is popular with many companies. Executive Training charges $500 for each seminar it conducts. The number of seminars offered over the last six months along with the total costs of offering these seminars appear below: Month Costs Incurred Seminars Offered January $15,400 55 February 14,200 45 March 18,000 60 April 14,700 50 May 19,600 75 June 16,500 58 Executive Training, Inc. expects to offer 72 seminars during July. Using the high-low method, calculate Executive Training's expected net income for July.
Explanation / Answer
using high low method;variable cost/seminar=(Total cost at highest level-total cost at lowest level)/(Highest level-Lowest level)
=(19600-14200)/(75-45)=$180
Total fixed costs=19600-(180*75)=$6100
Service revenue(500*72) 36000 Less:Variable costs(180*72) 12960 Less:Fixed costs 6100 Expected net income $16940.Related Questions
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