Setting Fees



Setting Fees

Solution Exercise 11.1

Proposed Seminar Budget

Identification of Fixed and Variable Costs

Fixed Costs

Rental of conference space

$ 175.0

Rental of Audiovisual equipment

$ 75.0

4 presenters @ $500

$ 2,000.0

Indirect cost

$ 906.00

Profit margin

$ 227.00

Sum of Fixed Costs

$ 3,383.0

Variable Costs

Workbooks

$ 15.00

Lunches

$ 12.00

Coffee

$ 3.50

Total variable costs

$ 30.50

Computations of the Seminar Fee

The numbers of trainees that have been used as the break-even point are forty-five.

XP = A + BX

45P = $3,383 + $30.50(45)

45P = $3,383 + $1,372.50

45P = $4,755.50

Dividing both sides by 45

P = $105.68 which is rounded up to $106.00

$ 3383/ ($105.68 - $ 30.50)

$ 3383 / $75.18 = 44.99 breakeven point ...