What is the equation for facilities cost

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Professional University teaches a large range of undergraduate courses. It is interested in determining the cost equation for the facilities cost as a function of student credit hours so that it an more accurately budget its facilities costs as enrollment grows. Information for the high and low cost semesters and volumes for last 5 years appears below

Semester                 Student Credit Hours            Facilities Cost
Spring 2007                          250,000              $500,000
Fall 2004                             300,000             $530,000

Problem 1: Using the high low method, with student credit hours as the activity driver, what is the equation for facilities cost (FC) as a function of student credit hours?

FC = $350,000 + $0.60 / student credit hour
FC = -$585,100 + $1.67 / student credit hour
FC = $1.77 / student credit hour
FC = $2 / student credit hour

Reference no: EM132718114

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