Bhimani, Horngren,
Datar and Rajan,
Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012 at closing down some of its academic programmes and reducing its intake of students. Reducing enrolled students
may cut down on overhead costs, but it also cuts down on revenues (tuition payments, hurts the reputation of the school
and reduces its alumni base, which is a future source of funds. For these reasons, ESM may prefer to downsize
its academic programmes, particularly those programmes that attract few students. Of course, ESM should continue to reduce costs by improving the efficiency of the delivery of its programmes.
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