Question

8-15. EXCEL APPLICATION: Going Green! Everybody talks "green." but some really do it. Marie Chong is a green home designer and builder who is producing a webi- nar to share her knowledge of green building. She learned that web conferencing requires only a PC and an Internet connec tion; however, audio conferencing capability is required if she wants to chat with attendees by telephone. Marie is working with a webinar hosting company that charges 10 cents per participant/per minute (ppm) for web conferencing, I5 cents ppm for audio conferencing, and $175 for online registration support. Although Marie will present some content herself she will hire a professional speaker who is an expert on wind turbines for home use, and she will include audio conferenc- ing so that attendees can interact with the speakers. The regis- tration fee for a 60-minute webinar is $159. Create the Excel spreadsheet shown in Figure 8-20 to determine the number of attendees required for Marie to make a profit. How does that number change if Marie reduces the registration fee to $149? Use formulas for all calculations and Goal Seek to set profit to $1 by changing the number of attendees. If the registration fe is $159, how many attendees are required for Marie to make a profit of $10,000?

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8-15. EXCEL APPLICATION: Going Green! Everybody talks “green.” but some really do it. Marie Chong is a green home designer and builder who is producing a webinar to share her knowledge of green building. She learned that web conferencing requires only a PC and an Internet connection; however, audio conferencing capability is required if she wants to chat with attendees by telephone. Marie is working with a webinar hosting company that charges 10 cents per participant/per minute (ppm) for web conferencing, 15 cents ppm for audio conferencing, and $175 for online registration support. Although Marie will present some content herself, she will hire a professional speaker who is an expert on wind turbines for home use, and she will include audio conferencing so that attendees can interact with the speakers. The registration fee for a 60-minute webinar is $159. Create the Excel spreadsheet shown in Figure 8-20 to determine the number of attendees required for Marie to make a profit. How does that number change if Marie reduces the registration fee to $149? Use formulas for all calculations and Goal Seek to set profit to $1 by changing the number of attendees. If the registration fee is $159, how many attendees are required for Marie to make a profit of $10,000?

Answer 1

total fixed cost = 1500 +175 = $1675

total variable cost per person = (.10 +.15)*60 = $15

reg fee per person = $159

hence VCR(variable cost ratio) = (variable cost per unit / reistration fee from a person)*100

= (15/159)*100 =9.43%

so PVR = 1-VCR

i.e, 1- 9.43% = 90.57%

To attain profit she must have one more pers90 than the break-even point (no profit no loss point)

break-even point revenue = fixed assets/PVR = 1675/90.57% =1850

for 1850 she must require 12 (11.64 round to greater number) participants since 1850/159=11.64

hence the number of attendees required for Marie to make a profit =12

if the reg fee was 149 the required number will be = 1850/149 =13 (12.4 round to greater number)

to make a profit of 10 000

contribution = 1675 + 10000 = 11675

revenue required = contribution/PVR =11675/90.57% =12890.58

No. of attendees required =12980.58/159 = 81.07