Question

Life Lessons provides academic enrichment and review activities for high school students in 4 subject areas: English, mathematics, science, and history. In November 20x1, the firm’s information system produced the following data:

	Number of Teachers	Number of Students	Percent of Faculty	Direct Costs
English	4	20	10%	$6000
Mathematics	3	24	25%	$8000
Science	5	15	50%	$12000
History	2	8	15%	$3000

Regardless of subject area, clients pay $50 per hour for tutoring services. Costs associated with the Life Lessons operations for November 20x1 included:

Facility rent		$2,500
Custodial services		1,800
Utilities		600
Computer equipment amortization		800
Advertising		400

Assume Life Lessons allocates facility rent, custodial services, and utilities on the basis of square metres occupied and computer equipment amortization on the basis of number of students. Advertising is not allocated. If students received 200 hours of mathematics tutoring in November 20x1, what will the total profit from mathematics tutoring be for the same period?

$10,000

$8,775

$8,488

$488

Answer 1

what will the total profit from mathematics tutoring be for the same period?

Revenue ($50 * 200 hours)	$10000
Expenses:
Facility Rent ($2500 * 25%)	$625
Custodial services ($1800 * 25%)	$450
Utilities ($600 * 25%)	$150
Computer equipment amortization ($800 * 24/67)	$287
Total Profit	$8488