Question

Question 5 -                                                                                                                18 Marks

CNN Media offers computer training seminars on a variety of topics. In the seminars each student works at a personal computer, practicing the particular activity that the instructor is presenting. CNN Media is currently planning a two-day seminar on the use of Microsoft Excel in statistical analysis. The projected fee for the seminar is $600 per student. The cost for the conference room, instructor compensation, lab assistants, and promotion is $9600. CNN Media  rents computers for its seminars at a cost of $60 per computer per day.

a. Develop a model for the total cost to put on the seminar. Let x represent the number of students who enroll in the seminar.

b. Develop a model for the total profit if x students enroll in the seminar.

c. CNN Media has forecasted an enrollment of 30 students for the seminar. How much profit will be earned if its forecast is accurate?

d. Compute the breakeven point

Answer 1

a.

total cost=9600+60*2*x=9600+120x

b.

total profit=revenue-cost=600x-(9600+120x)=480x-9600

c.

if 30 students enrolled, then
profit=480*30-4800=14,400-9600=4800

d.

480x-9600=0
x=9600/480=20

break-even point is 20, that is, if there are 20 students enroll, then profit will be 0.

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