Professional University teaches a large range of undergraduate courses.

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

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?

Options:

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