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Product Costing

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Wakefield, Inc., offers a CPA review course in cities throughout the eastern United States. Wakefield hires local CPA's to do the teaching. Each instructor is paid \$120 an hour to teach the course; a course consists of 12 weeks of instruction with sessions taking place 4 evenings a week for 2 hours at each session. The other instruction costs to Wakefield are to pay for hotel conference rooms to host the course. Generally, Wakefield pays the hotel \$625 per evening to rent a conference room. Also, tuition for the course includes all course materials, which cost the company \$180 for each student.

1. What is the product cost of providing one evening of instruction for all students?
2. What is the product cost of training a student over the entire course (there are 75 students in this particular course)?
3. Assuming that Wakefield charges each student \$1,200 for the course, how many students would be required to break even on this course?

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Solution Preview

Hi,

Please see response to your posting as given below.
Data:
Instructor charges \$120 per hour
Conference room charge \$625 per evening
Course material \$180 per student
Price \$1,200 per studeent
Course duration 12 weeks
Per evening duration 2 hours
Per week course days 4 days

1. What is the product cost of providing one evening of instruction for all students?
One evening duration is 2 hours, product would include instructor charges, conference room rent and course material.
Instructor charges = 2 hours*per hour charge ...

Solution Summary

Solution contains calculations of product cost of providing one evening of instruction for all students and training a student over the entire course.

\$2.19