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Professional University teaches a large range of undergraduate courses. It is interested in determining the cost question for the facilities cost as a function of student credit hours so that it can 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__________250000______________$500000
Fall 2004_____________300000______________$530000
Using the high low method, with student credit hours as the activity driver, what is the equation for the facilities cost (FC) as a function of student credit hours?
FC= $350000 + $0.60 / student credit hour
FC= $585100 + $1.67 / student credit hour
FC= $1.77 / student credit hour
FC= $2 / student credit hour
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