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A ONE OFF DEVELOPMENT AND PRODUCTION COSTS

COURSE OVERHEADS
Type of unit
No of units
Management
per annum salary
1.5
Secretarial support
per annum salary
0.750
Development Print
Type of unit
No of units
Authoring of study guide
Study guide (50 pp)
9
Preparation of a Reader
Reader (200 pp)
1
Editing and design
Per 50 pp
13
Copyright
Per 50 pp
13
Development Video-cassettes
Type of unit
No of units
Copyright clearance (video material)
Per 60 min
9
Production
Per 60 min
9
Development Assignment
Type of unit
No of units
Assignment
Per assignment
3
Total fixed costs of development
B MAINTENANCE COSTS (PART OF PRINTED MATERIAL ONLY)
Author
Per study guide
2
Editing and design
Per study guide
2
Total fixed costs of maintenance
Total fixed costs
C ANNUAL PRESENTATION COSTS (all per student)
Student Support
Type of unit
No of units
Marking of assignment
Per assignment
3
Tutor (per group of 25)
Per Hour and group of 30
0.4
Tuition expenses
Per group of 30
0.03333
Replication and Distribution
Type of unit
No of units
Production study guides
Per study guide
9
Production assignments
Per assignment
3
Production of Reader
Per reader
1
Production of cassette
Per cassette
9
Packaging and postage
Per mailing
3
Total variable cost per student
D INCOME (per student per credit)
Fee
Per credit point
3

Rate per unit No of persons

$70,000
1
$23,500
1
Rate per unit
$14,000
$7,600
$3,900
$2,400
Rate per unit
$9,500
$23,000
Rate per unit
$350

Costs ($$)
$105,000
$17,625
Costs ($$)
$126,000
$7,600
$50,700
$31,200
Costs ($$)
$85,500
$207,000
Costs ($$)
$1,050

$1,100
$2,800

$2,200
$5,600

Rate per unit

$45.00
$65.00
$80.00
Rate per unit
$8.90
$1.20
$16.00
$12.00
$9.00

Cost/student ($$)
$135.00
$26.00
$2.67
Cost/student ($$)
$80.10
$3.60
$16.00
$108.00
$27.00

$420.00

Income per student

$1,260

Year 1
No of students
Accumulated
Cash flow
FD depreciated (5 years)
FM depreciated (2 years)
F depreciated
FD annualized (5 years at 5%)
FM annualized (2 years at 5%)
F annualized/per year
F annualized (total)
Aggregate unit costs
TC=F+VxN
AC=F/N+V
Income per student
Income
Profit

$631,675
7800
639475
$631,675
$7,800
$737,895
$398

$1,260

$126,335
$3,900
$145,901
$4,195

Year 2

Year 3

Year 4

200
200

200
400

200
600

$126,335

$126,335

$126,335

126335
$145,901

126335
$145,901

126335
$145,901

$145,901 $145,901
$737,895 $737,895
$398
$398
$817,569 $897,243
$4,088
$2,243
$1,260
$1,260
$252,000 $504,000
-$565,569 -$393,243

$145,901
$737,895
$398
$976,917
$1,628
$1,260
$756,000
-$220,917

Year 5
200
800

200
1000

Total
1000

$126,335 $126,335 $631,675

$3,900
$3,900
130235
130235
639475
$145,901 $145,901 $729,505
$4,195
$4,195
$8,390
$150,096 $150,096 $737,895
$737,895 $737,895
$398
$398
$1,056,591 $1,136,265
$1,321
$1,136
$1,260
$1,260
$1,008,000 $1,260,000
-$48,591 $123,735

Average Cost function

$4,500
$4,088

$4,000

Average Cost per Student

$3,500

$3,000

$2,500
$2,243
$2,000
$1,628

$1,500

$1,321
$1,136
$1,000

1000
800
600

$500

400
$398

$398
200

$398

$398

$398

$0
200

200

200

200

200

Number of Students
Aggregate unit costs

AC=F/N+V

No of Students Accumulated

$398

Break Even Analysis (Formation of Europe)

$1,400,000

$1,260,000
$1,200,000
$1,136,265

Total Cost and Income

$1,000,000

$976,917

$1,056,591
$1,008,000

$897,243
$800,000

$817,569
$737,895

$737,895

$756,000
$737,895

$737,895

$737,895

600

800

1000

$600,000
$504,000
$400,000

$252,000

$200,000

$0

200

400

Number of Students
F annualized(total)

TC=F+V*N

Income

Accumulated No. of Students

Year 1

No of students
Accumulated
F annualized (total)
Aggregate unit costs
TC=F+VxN
AC=F/N+V
Income per student
Income
Profit

Year 2
Year 3
Year 4
Year 5
Total
200
200
200
200
200
1000
200
400
600
800
1000
$737,895 $737,895 $737,895
$737,895 $737,895 $737,895
$398
$398
$398
$398
$398
$398
$817,569 $897,243
$976,917 $1,056,591 $1,136,265
$4,088
$2,243
$1,628
$1,321
$1,136
$1,260
$1,260
$1,260
$1,260
$1,260
$1,260
$252,000 $504,000
$756,000 $1,008,000 $1,260,000
-$565,569 -$393,243
-$220,917
-$48,591 $123,735