Type of ingredient

Management (ongoing)
Manager
Management support
Total recurrent management costs
Development
Management (development)
Manager
Management support
Development course material
Study guide
Content development
Layout & design
Podcasts
Content development
Editing
Syllabus
Discussion prompts
Assignments
Total development costs
Maintenance
Content development
Layout & design
Total maintenance costs
Total fixed costs
Delivery
Online discussion (G=25)***
Marking assignments
Essay
Spreadsheet
Collaborative assignment
Printing costs
Postage
Total variable cost per student
Income
***Note that ac. participation in online
discussion is a semi-variable cost

Course management
Course management support

Course management
Course management support
1 study guide @ 150 pages
academic time
professional time
5 podcasts
academic time
professional time
academic time
academic time
academic time

academic time
professional time

academic time
academic time
academic time
academic time
1 study guide @ 150 pages
1 study guide @ 150 pages

Unit

# units

cost/unit

cost

annual salary
annual salary

0.5
0.5

70,000 USD
40,000 USD

35,000 USD Fixed Recurrent Operating

20,000 USD Fixed Recurrent Operating
55,000 USD R

annual salary
annual salary

0.2
0.8

35,000 USD
20,000 USD

7,000 USD Fixed Capital

16,000 USD Fixed Capital

hours
hours

50
10

30
20

hours
hours
hours
hours
hours

20
10
10
50
9

30
20
30
30
30

hours
hours

20
5

30
20

hours

150

30

hours
hours
hours

0.5
0.66
0.5
1
1

30
30
30
5
3

per credit point

280 USD

1,500 USD Fixed Capital

200 USD Fixed Capital
600
200
300
1,500
270
27,570

USD
USD
USD
USD
USD
USD

600 USD
100 USD
700 USD
28,970 USD

Fixed
Fixed
Fixed
Fixed
Fixed
FD

Capital
Capital
Capital
Capital
Capital

Fixed Capital
Fixed Capital
FM
F

45 USD Variable Operating

15
20
3
5
3
91
840

USD
USD
USD
USD
USD
USD
USD

Variable
Variable
Variable
Variable
Variable
V
SF

Operating
Operating
Operating
Operating
Operating

nt Operating
nt Operating

Recurring
Recurring
Recurring
Recurring
Non-Recurring

# students per annum

acc # students
Recurrent management costs
Fixed costs of
development
maintenance

55,000 USD
27,570 USD
700 USD

3,939 USD
$233.33

27,570 USD
700 USD

4,260 USD
108 USD

Annualized fixed costs of

development
maintenance
Total fixed costs
Variable costs
TC=FC+V*N
AC=F+N/V
Income per student
Total income
Income - cost
Break even point

91 USD

840 USD

TOTAL COSTS

1,200,000 USD
1,000,000 USD
800,000 USD
600,000 USD
400,000 USD
200,000 USD
0 USD

100
Number of Students

200

300
400
Total income

500
TC=FC+V*N

600

700

00

Year 1

Year 2

Result

Year 4

Year 5

100
200
55,000 USD

100
300
55,000 USD

100
400
55,000 USD

100
500
55,000 USD

3,939 USD

3,939 USD

3,939 USD

3,939 USD

58,939 USD

58,939 USD

58,939 USD

58,939 USD

3,939 USD
233 USD
58,939 USD

4,260 USD

4,260 USD

4,260 USD

4,260 USD

59,039
413,270
91
422,350
4,224
840
84,000
-338,350

Input
Input
Input

Year 3

100
100
55,000 USD

USD
USD
USD
USD
USD
USD
USD
USD
552

59,039
413,270
91
431,430
2,157
840
168,000
-263,430

r
n
C
(1+r)
(1+r) n
a(r,n)
C*a(r,n)

USD
USD
USD
USD
USD
USD
USD
USD

59,039
413,270
91
440,510
1,468
840
252,000
-188,510

USD
USD
USD
USD
USD
USD
USD
USD

Annualization
rate
years
amount
(Intermediate value)
Annualization factor
Annualized amount

59,039
413,270
91
449,590
1,124
840
336,000
-113,590

USD
USD
USD
USD
USD
USD
USD
USD

4,260
108
59,039
413,270
91
458,670
917
840
420,000
-38,670

USD
USD
USD
USD
USD
USD
USD
USD
USD
USD

4,500 USD

2.0%
7
27570
1.0200
1.1487
0.155
4260

4,000 USD
3,500 USD
3,000 USD
2,500 USD
2,000 USD
1,500 USD
1,000 USD
500 USD
0 USD
100

Number of S tudents

200

Year 6

Year 7

100
600
55,000 USD

100
700
55,000 USD

3,939 USD
233 USD
58,939 USD

3,939 USD
233 USD
58,939 USD

4,260
108
59,039
413,270
91
467,750
780
840
504,000
36,250

USD
USD
USD
USD
USD
USD
USD
USD
USD
USD

4,260
108
59,039
413,270
91
476,830
681
840
588,000
111,170

412,570 USD

USD
USD
USD 413,270 USD
USD help line
USD
USD
USD
USD
USD
USD

4,500 USD

AC function

4,000 USD

AVERAGE COSTS

3,500 USD
3,000 USD
2,500 USD
2,000 USD
1,500 USD
1,000 USD
500 USD
0 USD
100

Number of S tudents

200

300

400

500

Variable 700
Costs
600
AC=F+N/V