This document summarizes the costs for a two-day class with an estimated 30 attendees. Total revenue from class fees is $18,000. Fixed costs of $1,200 include room rental and advertising. Variable costs of $9,150 include credit card fees, postcard printing and mailing, food and supplies. Total costs are $10,350, leaving a profit of $7,650 without accounting for the instructor's 150 hours of labor.

1. Chapter 7 Number 5
Class cost / person $600.00 POSTCARD COSTS
Credit Card Flat Fee $20.00 Number of Postcards Printed 5,000
Credit Card Transaction Fee 5.00% Number of Postcards Sent 4,000
Estimated Registered Attendees 30
Printing Cost Each/Total $0.40 $2,000.00
TOTAL REVENUE Mailing and postage Each/Total $1.00 $4,000.00
Total Revenue $18,000.00 Beverage and Lunch Each/Total $25.00 $750.00
Class Handouts Each/Total $30.00 $900.00
FIXED COSTS
Fixed Cost $500.00 CREDIT CARD COSTS
Setup fee $400.00 5% Per person $900.00
Designing & Advertising $300.00 Minus $20 Per Person $600.00
Material Development Rate $0.00 Total Credit Card Cost $1,500.00
Total Fixed Costs $1,200.00
VARIABLE COSTS
Credit Card Processing Cost $1,500.00
Postcard Printing Cost $2,000.00
Postcard Mailing Cost $4,000.00
Food & Beverage Cost $750.00
Class Handout Costs $900.00
Total Variable Costs $9,150.00
Total Revenue $18,000.00
Total Costs $10,350.00
Labor Costs Time Invested Hrs. Hourly Profit
Total Profit: $7,650.00 $0.00 150 $51.00
Yellow = Variable Cost and can be changed
Project Constraints:
1. You will be charge $600 per person for a two-day class
2. You estimate that 30 people will register for and attend the class, but you want to change this input
3. Your fixed costs include
$500 total to rent a room for both days
$400 for registration
4. You will NOT include any of your labor costs for this estimate, but you estimate that you will spend at least
150 hours developing materials, managing $300 for designing a postcard for class. You would like to know what
the project, and giving the actual advertising
your time is worth given different scenarios.
5. You will order
Total 5,000 postcards
4,000 mail
Distribute the rest to friends and colleagues
6. Your variable costs include the following
a. -$5 per person for registration + 4% of the class fee per person
b. $0.40 per postcard for priting if you order 5,000 or more
c. $0.25 per postcard for mailing and postage.
d. $25 per person for beverages and lunch.
e. $30 per person for class handouts.