Question

A university schedules summer school courses based on anticipated enrollment. The cost for faculty compensation, laboratories, student services, and allocated overhead for a computer class is $8500. If students pay $920 to enroll in the course, how large would enrollment have to be for the university to break even?

Answer 1

Answer:

$9.23 students

Explanation:

The computation of the break even units is shown below:

= Fixed cost ÷ Contribution margin unit

= $8,500 ÷ $920

= $9.23 students

We simply divided the fixed cost by the contribution margin units so that the break even units could come. The fixed cost shows the cost related to the services, and other purposes that are mentioned in the question