A professional organization is planning to conduct a series of one-day continuing education programs in various cities. The projected costs related to these programs are

 A professional organization is planning to conduct a series of one-day continuing education programs in various cities. The projected costs related to these programs are


Promotional advertising    $1,250     per program
Instructor’s fee    $750     per program
Instructional materials    $12     per participant
Hotel Charges:         
      Room rental and setup fee           $400     per program
      Continental breakfast     $10     per participant
      Lunch     $25     per participant
      Refreshment breaks     $8     per participant


The hotel requires a $200 nonrefundable deposit on the room rental and setup fee 75 days prior to the program. At about the same time, the promotional advertising materials are developed, prepared, and mailed to potential participants, and a 20% payment is made to ensure the services of an instructor.  The instructor keeps this 20% payment even if the program is canceled and receives the balance of the fee at the conclusion of the program.  The remaining hotel fees and charges, as well as the cost of instructional materials, are paid at the conclusion of the program.



The capacity for each program is 100 persons, but past attendance for similar programs has averaged 80 persons.



The cost-estimating equation for calculating the costs for a one-day continuing education program is
$79 times the number of participants.
$85 times the number of participants.
$800 plus ($55 times the number of participants).
$2,400 plus ($55 times the number of participants). correct

 

 
 This response omits the promotional advertising ($1,250), the 20% down payment to the instructor ($750 × 0.2 = $150), and the nonrefundable room rental and set-up fee ($200) from the fixed cost calculations [$2,400 – ($1,250 + $150 + $200)]. The variable cost figure is correct.