Fee Setting

Assignment: Fee Setting

Exercise 11.1

The government benefits seminar for children and families was a major success, so Advocates for Children will carry out a similar seminar in a nearby town. The executive director has decided that this second seminar should make the highest possible amount of money. For this reason, they will not offer a reduced fee schedule, and all attendees must pay the entire fee. This seminar will happen in a smaller room than the first one did, which can only leave space for 45 trainees, at most. Here is the seminar's proposed budget:

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 $3,623.50 7. Indirect costs @ 25% of $3,622.50 $ 906.00 Subtotal $4,529.00 8. Profit margin @ 5% of $4,528.13 $ 227.00 Subtotal $4,756.00

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?

Fixed Costs

1. Conference room rental $175.00 $ 175.00
2. Audiovisual equipment Rental 75.00
3. 4 presenters @ $500 2,000.00
4. Indirect costs @ 25% of $3,675.00 $ 906.00 5. Profit margin @ 5% of $4,594.00 $ 227.00 Total Fixed Costs $3,383.00

Variable Costs

6. 45 workbooks @ $15 $15.00
7. 45 lunches @ $12 12.00
8. 45 coffees @ $3.50 3.50 Total Variable Costs $30.50

Breakeven point

I would put my breakeven and go/no go point at 30