You run a school in florida. fixed monthly cost is $5000 for rent and utilities, $3000 is spent in salaries and $500 in insurance. also each student adds up to $90 expense per month for stationary, food etc. you charge $1000 per month from every student. you are considering moving the school to another neighborhood where the rent and utilities will increase to $8000, salaries to $5000 and insurance to $1000 per month. variable cost per student will increase up to $150 per month. however, you can charge $1500 per student. at what point will you be indifferent between your current mode of operation and the new option?

the indifference point is at 12.5

as there can't be 12.5 student it will be between 12 and 13 student per month.

Explanation:

the indifference point will be when the two alternatives yield the same result

(sales price - variable cost)Q - fixed cost = operating income

current scenario:

(1,000 - 90) Q - 8,500  

proposed scenario:

(1,500 - 150)Q - 14,000

We equalize each other and solve for Q

(1,000 - 90) Q - 8,500   =  (1,500 - 150)Q - 14,000

910Q - 8,500 = 1,350Q - 14,000

14,000 - 8,500 = (1,350 - 910)Q

        5,500     =       440Q

    5,500/440 =        Q

              12.5  =        Q

one of the disadvantages of getting a government sponsored mortgage is they put a limit on the purchase price of the house. because the government is in charge of the mortage loan and terms, they are able to control how much money they are allowing someone to take out for the loan. not only are they incontrol, it's a lengthy process for a government sponsored mortgage.

answer; personality;