A new company, Ryan Inc., has hired you to set-up the Human Resources Department. As part of its community outreach programs, Ryan Inc. would like your department to provide career counselling services to individuals in the neighbourhood. The fixed costs to run this service are $70,000. You estimate that each career counselling session will cost $240 (the estimated per diem cost for the counsellor). You have been given a budgeted appropriation of $100,000 for all costs. 1. Given your current budget above, how many individuals would you be able to serve? 2. After a successful launch of the program, you would like to expand it to serve 150 individuals. The cost per session will remain the same but you believe that additional administrative support is necessary. You are proposing to hire a support person for the department who would also support the program 25% of their time. The total additional cost to the program is estimated to be $10,000. How much budget should you request to serve the 150 individuals?

A new company, Ryan Inc., has hired you to set-up the Human Resources Department. As part of its community outreach programs, Ryan Inc. would like your department to provide career counselling services to individuals in the neighbourhood. The fixed costs to run this service are $70,000. You estimate that each career counselling session will cost $240 (the estimated per diem cost for the counsellor). You have been given a budgeted appropriation of $100,000 for all costs. 1. Given your current budget above, how many individuals would you be able to serve? 2. After a successful launch of the program, you would like to expand it to serve 150 individuals. The cost per session will remain the same but you believe that additional administrative support is necessary. You are proposing to hire a support person for the department who would also support the program 25% of their time. The total additional cost to the program is estimated to be $10,000. How much budget should you request to serve the 150 individuals?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 31P

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