Star study centre provides coaching classes to school students. The study centre has taken an auditorium of 250 seat capacity on rent of 3,75,000…

CA Intermediate · Cost and Management Accounting · MTP · January 2026
Star study centre provides coaching classes to school students. The study centre has taken an auditorium of 250 seat capacity on rent of 3,75,000 per month. It has also hired some renowned teachers for taking classes. A teacher takes - 3,000 per hour. The study centre has decided to conduct a batch of 2-hour per day for 3 days a week for 4 months. (i) CALCULATE the total cost per batch. (ii) COMPUTE the minimum fee to be charged per student in a batch, if the centre operates at 60% capacity. (iii) DETERMINE the fee per student if the study centre desires to earn a profit of 50% and study centre operates at 50% capacity.

Suggested Answer and Working Notes:

(i) Calculation of total cost per batch: Particulars Amount (₹) (i) Auditorium hire charges (₹ 3,75,000 × 4 months) 15,00,000 (ii) Teachers' remuneration (₹ 3,000 × 2 hours × 3 days × 4 weeks x 4 months) 2,88,000 Total cost 17,88,000 (ii) Computation of minimum fee per student per batch: Minimum fee to be charged = Total Cost / No. of students = 17,88,000 / (250 students * 60%) = 17,88,000 / 150 students = 11,920/- (iii) Fee to be charged per student = (Total Cost + Profit) / No. of students = (₹ 17,88,000 +8,94,000) / (250 students * 50%) = 26,82,000 / 125 students = 21,456

Topics: Service Costing

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