Question

Student tuition at Boehring University is ​$150 per semester credit hour. The state supplements school revenue by ​$90 per semester credit hour. Average class size for a typical 3​-credit course is 50 students. Labor costs are ​$4,400 per​ class, materials costs are ​$22 per student per​ class, and overhead costs are ​$27,000 per class. The multifactor productivity ratio currently is 1.11 and the labor productivity ratio is ​$160.71 per hour if the instructors work on an average of 14 hours per week for 16 weeks for each 3​-credit class of 50 students.

Coach Bjourn Toulouse led the Big Red Herrings to several disappointing football seasons. Only better recruiting will return the Big Red Herrings to winning form. Because of the current state of the​ program, Boehring University fans are unlikely to support increases in the​ $192 season ticket price. Improved recruitment will increase overhead costs to ​$30,000 per class section from the current ​$27,000 per class section. The​ university's budget plan is to cover recruitment costs by increasing the average class size to 75 students. Labor costs will increase to ​$7 comma 000 per 3​-credit course. Material costs will be about ​$35 per student for each 3​-credit course. Tuition will be ​$200 per semester​ credit, which is supplemented by state support of ​$90 per semester credit.

Answer 1

Ans

The comparison of both the years profit is shown below:

	Year 1	year 2
average class size	50	75
	per 3 credit class
student tution	=150*3*G3	=200*3*H3
state contribution	=90*3*G3	=90*3*H3
labour cost per class	4400	7000
material cost per class	=22*G3	=35*H3
overhead cost per class	27000	30000
Profit per class	=G6+G7-G8-G9-G10	=H6+H7-H8-H9-H10

The values are given below:

	Year 1	year 2
average class size	50	75
	per 3 credit class
student tution	22500	45000
state contribution	13500	20250
labour cost per class	4400	7000
material cost per class	1100	2625
overhead cost per class	27000	30000
Profit per class	3500	25625

The total number of classes is shown below:

Total labour output	=160.71*16*14
number of classes	=G13/4400

no of classes: 8.1~8