Harlan Foundation Harvard Case Solution & Analysis

What weekly fee should be charged for campers?

As mentioned earlier that, some of the campers cannot afford to pay either the full fees or half of the fees and for these campers Harlan was considering to define a fee that would be minimal as well as cover the expenses incurred in the camping activities. That price would also be at the breakeven point where there will be no loss and no profit.

To calculate the fees that would be charged for the campers the calculations have been done in the excel sheet. In calculation there were some variable those were used such as staff salaries and given benefit to those staff and these were around $90,000. These salaries were used as a cost for the Harlan Foundation’s new camping activities. The other cost that was used in these fees was the food cost that was equal to the $19,000. Operating supplies, Telephone and utilities, Insurance, Rental equipment, Contingency and Miscellaneous cost. All of these expenses are included in terms of calculating the Fees that would be charged for the campers.

The Operating supplies have amounted to $4,000, Telephone and utility expenses are amounted to $9000 and these utilities would be used during the camping season. Rental of the equipment are also included in the cost as equipment’s are rented for the camping activities. The equipment rent amounts to $7,000 and the insurance of the campsite is also considered as an expense and it is around $15,100 the remaining expenses that incurred is also accounted for as  Contingency and Miscellaneous cost and that cost is amounting to $7,200. All these costs are incorporated in determining the Fees.

The fees that would be charged for the campers is determined as $378.25 and below this fee would incur the loss for the Harlan Foundation and above this price would be the expected profit for the Harlan Foundation. On the other hand, this is the nominal Fees that would be charged and with this camper would be willing to pay and for those campers that could not afford to pay this price, contribution and grants would be enough to cover the remaining campers Fees. This price is also the breakeven point for the Harlan Foundation as the foundation already operated on the break-even valuation approach.

Please refer the Exhibit 1 for the fee that would be charged and for the calculation of that fee refer the Excel sheet.

 

Assuming a fee of $100, what is the break-even point of the seminar?

The Fee that would be charged from the seminar attendees also incorporate3s some variable such as but before calculating the breakeven point, there must be some understanding of the breakeven analysis that should be incorporated.

In a breakeven analysis, there are two variables, one known as fixed costs and second is known as variable cost where fixed cost remain the same and variable cost varies as per activities. In the calculation of the seminar’s breakeven point where the fee is $100 the fixed cost are such as: Hotel rent which is around $200, audio visual rent cost amounted to $100, Instructor Fees is $500 for one instructor, but as Harlan Foundation is required to instructor it would increase by $500 and the total instructor cost would be around $1000. The printing cost is also taken as the fixed cost and it is amounted as $900, and another fixed is out of pocket expenses that is amounting as $200. All of these costs are the fixed cost and the variable cost is taken such as, meals cost per person that is amounting as $20 and per notebook cost that is around $10.

From the variable cost the total copies that would be printed would cost around $600 as 60 copies would be printed and meals cost would totaled as $600. But the Variable cost per unit would be around $30 and total fixed cost would be around $2,400.  At the price of $100, the contribution margin would be around $70 and breakeven would be 34 units.

Please refer the Exhibit 2 in the Appendices section given below for the breakeven point and for the calculation of that breakeven point refer the Excel sheet.

What fee should be charged for the seminar?

The fee that would be charged for the seminar is $114.29. This price is calculated using the breakeven approach and breakeven point was 34 units. If Harlan Foundation would charge lower than this price than it would incur loss to the foundation and expenses would not be covered regarding the seminar. The standard price in the Minneapolis city is around $150 to $250 that includes....................................

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