Fixed,Variable,and Average Costs Midstate University Is Trying to Decide Whether to Allow 100

question 14

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?

---

Definitions:

Nursing Home Care

Professional care provided in a facility for individuals who require constant nursing care and have significant deficits in daily living activities.

Independent Living

The ability for a person to live autonomously, managing their own day-to-day tasks without the need for continuous assistance.

Aging in Place

The concept of allowing seniors to live in their residence of choice for as long as they are able, as they age.

Village Care

The support, nurturing, and maintenance of individuals' well-being by the community or collective group, typically in a small, local village setting.