Fee Setting

Topics: Variable cost, Costs, Fixed cost Pages: 4 (471 words) Published: March 14, 2011
Fee Setting Assignment

Candace Fralix

February 18, 2011

HSM/260

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 \$3,675.00 \$ 906.00
Subtotal \$4,529.00
8. Profit margin @ 5% of \$4,594.00 \$ 227.00
Total \$4,756.00

Fixed Cost
Conference room rental\$175.00
Audiovisual equipment rental\$75.00
4 Presenters @ \$500.00\$2,000
Indirect Cost @25% of \$3,675\$906.00
Profit Margin @5% of \$4,594\$227.00
Total Fixed Cost\$3,383.00

Variable Cost
45 Workbooks @ \$15.00\$675.00
45 Lunches @ \$12.00\$540.00
45 Coffees @ \$3.50\$157.50
Total Variable Cost\$1372.50
My Break-Even point and go/no go decision is set at 30 participants. It is set lower so that if we exceed more than thirty participants then the rest would be a profit.

Break-Even Point
XP= A+BX
30P= \$3,383+\$1372.50
30P=\$3,383+\$41,175
30P=\$44,558
P=\$1485.26
The fee is still within the standard bracket.

Exercise 11.2
Fees setting based on the following costs:
Direct cost will comprise of
Fixed direct costs
Human resource cost (Trainer Cost)
(\$ 200 per hr and if seminar is 8 hr then total per day) = \$1,600 Other fixed direct costs = \$400
Variable direct costs
Material cost (If books are given to each participant) = \$10 Other Miscellaneous variable direct costs = \$5
Indirect cost will comprise of
Fixed indirect costs (per Day)
Depreciation = 274
Rent = 100
Other fixed indirect costs = 300
Variable Indirect costs (per participants)

Miscellaneous variable direct costs = 5

Total Variable Costs (per participants)
Material Cost\$10.00
Other Miscellaneous Variable Direct Cost\$5.00
Miscellaneous Variable Direct Cost\$5.00

Total Variable Cost=\$20.00

Total Fixed Cost
Human Resource Cost...

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