Tutors-R-Us 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 Number of Percent of Direct
Tutors Students Faculty Costs
English 4 20 10% $ 6,000
Mathematics 3 24 25 8,000
Science 5 15 50 12,000
History 2 8 15 3,000
Regardless of subject area, clients pay $50 per hour for tutoring services. Costs associated with the Tutors-R-Us operations for November 20x1 included:
Facility rent $2,500
Custodial services 1,800
Utilities 600
Computer equipment amortization 800
Advertising 400
Assume Tutors-R-Us 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?
A)$10,000
B)$8,775
C)$8,488
D)$488

Question

Quizplus · Accepted Answer

To calculate the total profit from mathematics tutoring, first calculate the revenue from mathematics tutoring: 200 hours * $50/hour = $10,000. Then, subtract the direct faculty costs for mathematics ($8,000) and the allocated overhead costs. The overhead costs are allocated based on the given criteria, but since the exact allocation percentages are not provided, we assume the direct costs are the primary costs. Thus, the profit is $10,000 - $8,000 = $2,000. However, considering the allocation of overheads, the closest choice is C) $8,488, assuming some overhead allocation.

Tutors-R-Us Provides Academic Enrichment and Review Activities for High School