Fixed, Variable, and Average Costs

question 17

Essay

Fixed, Variable, and Average Costs
Midstate University is trying to decide whether to allow 100 more students into the university. Tuition is $5000 per year. The controller has determined the following schedule of costs to educate students: The current enrollment is 4200 students. The president of the university has calculated the cost per student in the following manner: $30,600,000/4200 students = $7286 per student. The president was wondering why the university should accept more students if the tuition is only $5000.
Required:
a. What is wrong with the president's calculation?
b. What are the fixed and variable costs of operating the university?

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The official currency of the eurozone, which is a monetary union of 19 of the 27 European Union member states.

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The currency of the United States, used as the standard unit of money in international trade and domestic transactions.

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A broader framework that explains various aspects of the economy, including how goods and services are produced, distributed, and consumed.

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