Accounting 9706 · AS & A Level · Costs and cost behaviour

Costs and cost behaviour — practice question

The information for a proposed college course is given below: Fee charged per student: $\$100$ Variable cost for each student: $\$20$ Overall fixed cost for the course: $\$480$ The expected number of students is 10. However, if the fee is lower, 20 students are expected to join the course. By how much must the course fee of $\$100$ be lowered in order to make the total profit from 10 students the same as the total profit from 20 students?

  • A$\$16$
  • B$\$24$
  • C$\$40$
  • D$\$50$

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