Business, 19.02.2020 23:04 hdhdhd49jdhd
Professional Exam Prep (PEP) uses a cost-plus model to determine the price it charges students. Specifically, the Company charges cost plus 25% of cost. Fixed cost including facility rental and instructor compensation amount to $6,000 per month. PEP incurs variable costs for books and supplies that amount to $50 per student. Monthly, enrollment tends to fluctuate. The following data represent the Company’s expectations for the first three months of the current year.
Day
January
February
March
Total
No. of Students
20
30
50
100
Total Variable Cost
$1,000
$1,500
$2,500
$5,000
Total Fixed Cost
$6,000
$6,000
$6,000
$18,000
Based on this information which of the following amounts represents the average price PEP should charge per student for the month of January.
$287.50
$230.00
$350.00
$437.50
Answers: 3
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