Hsm 260

Hsm 260

• Submitted By: nikki3311
• Date Submitted: 03/30/2010 12:23 PM
• Words: 741
• Page: 3
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Exercise 11.1
The child and family government benefits seminar was such a success that Advocates
For Children will conduct a second seminar in an adjoining community. The executive director decides that this second seminar will attempt to maximize revenues. Consequently, no reduced fee schedule will be offered. All trainees will pay the full seminar fee. The seminar will take place in a smaller conference room than the earlier one. The room can only accommodate a maximum of 45 trainees. Here is the proposed budget for the seminar: You are the executive director. Following the checklist in Figure 11.1, perform all the computations necessary to set a fee. What will your fee be? What is your break-even point? What is your go/no-go decision point?
Proposed Seminar Budget
1. Conference room rental \$175.00 \$ 175.00
2. Audiovisual equipment Rental 75.00
3. 4 presenters @ \$500 2,000.00
4. 45 workbooks @ \$15 675.00
5. 45 lunches @ \$12 540.00
6. 45 coffees @ \$3.50 158.00
Subtotal \$3,623.00
7. Indirect costs @ 25% of \$3623 \$ 906.00
Subtotal \$4,529.00
8. Profit margin @ 5% of \$4529 \$ 227.00
Total \$4,756.00

Total Fixed Cost = Conference room Rental + Audiovisual Equipment Rental + Presenter
\$175 + \$75 + \$2,000=\$2250
Total Variable Cost = Cost of workbooks + Cost of Lunches + Cost of Coffees
\$675 + \$540 + \$157.5=\$1372.5 or
3622.5/100x25=905.63
Total Cost = Total Fixed Cost + Total Variable Cost + Overhead cost
\$1,375.5 + \$3,622.5 + \$905.63=5903.63
Profit margin = 5% of total cost
4528.13/100x5= \$226.41
Total Minimum revenue to be generated = Total Cost + Profit Margin
\$4,528.13 + \$226.41=4754.54
Suggested Fee = Total Minimum revenue to be generated /45
\$4,754.54/45 = \$105.66
Per unit Variable cost
Workbooks = \$15
Lunches = \$12
Coffee = \$3.5
Total per unit Variable cost = \$30.5
Break Even Point At suggested fees = Total Fixed cost + Total Over Head Cost / Suggested fees – Variable Cost per...