currently 525 subscribers; raised coord's salary,hired asst.

barbboop

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Nov 5, 2008
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It has been two years since the New River Community Council (NRCC) started its newsletter dealing with state and community funding opportunities for human service agencies. The current number of subscribers to the newsletter is 525. During the second year, the NRCC hired a new part-time newsletter coordinator (social work student). The NRCC has raised the salary of the part-time newsletter coordinator to $6,000 per year and has also hired another part-time student as an assistant for ten hours a week. The assistant is to be paid $75 per week or $3,900 per year. Together the newsletter coordinator and the part-time assistant believe they can handle up to 650 newsletter subscribers. Beyond this number, the newsletter program will require still more staff resources. In order to help cover the cost of the new part-time assistant, the executive director has also decided to increase the annual subscription price of the newsletter to $20. Additionally, the variable costs of preparing, printing, and mailing six bimonthly issues of the newsletter have risen to $4.50. Recompute the BEP for the newsletter program. What is the new BEP? Is the new BEP a feasible solution? Why or why not? Will any slack capacity exist? If so, how much? If not, why not?

The fixed costs would be -$9,900
Variable costs would be - $13,000 ($20 x 650)
additional variable costs - $ 4.50 x 12=54.00 (bi-monthly) and $54 x 12(months)=$648 annually
total variable costs would be $13,648.
Am I even on the right course here to figure out the new BEP?
 
Re: Please help with accounting problem

barbboop said:
... the variable costs [for] ... six bimonthly issues ... have risen to [a total of] $4.50 ...

... variable costs - $ 4.50 x 12=54.00 (bi-monthly) and $54 x 12(months)=$648 annually


Although the adjective "bimonthly" now has alternate definitions (due to increasing alacrity for sloppiness in contemporary American English), I read it to mean "once-every-two-months" in this exercise because of the quantifier "six". In this case, six bimonthly issues span one year.

Instead of multiplying 4.50 times some number of months, it seems to me that you would want to multiply 4.50 times some number of subscribers. That would give the NRCC's newletter-production cost for one year.

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barbboop said:
... Variable costs would be - $13,000 ($20 x 650)


This looks like revenue, to me.

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barbboop said:
...

Recompute the BEP for the newsletter program.


You defined NRCC, but what is BEP?

Cheers,

~ Mark :)

 
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