Kids Early Start (KES) operates from Monday to Friday. KES provides child care and educational services for inner-city kids between the ages of 3 months and 5 years. It has fixed expenses of $35,000...

Kids Early Start (KES) operates from Monday to Friday. KES provides child care and educational services for inner-city kids between the ages of 3 months and 5 years. It has fixed expenses of $35,000 per week and charges parents $15 per day for each child who attends the program. A city contract pays the KES $25,000 per week. It costs KES $5 per day for supplies and snacks for each child. KES also offers an optional early reading program for children over the age of 3. Parents pay an additional $3 per day to enroll a child in the reading program. It costs KES an additional $4 per day for each child in the program. Thirty percent of the children attending KES are enrolled in the reading program.

1. How many children have to come to KES each week for it to break even?

2. If the percentage of children in the reading program rises from 30 to 35 percent, the break-even level

a. increases.

b. decreases.

c. stays the same.