# CheckPoint Calculating Fixed Costs, Variable Costs, and Break-Even Point for a Program Calculate the

 CheckPoint Calculating Fixed Costs, Variable Costs, and Break-Even Point for a Program Calculate the fixed cost, variable costs, and break-even point for the program suggested in Appendix D. Base your calculations on the financial data for 2002. Post your final answers as a Microsoft Word attachment.

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C H A P T E R 11 Setting Fees Fee setting can be operationally defined as the process of determining how much an agency will charge for its products and services. Fees are usually established in one of two ways. Afee can be set on a per output (or unit-of-service) basis, or else on a per client or per participant basis. Whereas cost accounting standards and guidelines exist for the purposes of determining the full cost, or total cost, of a human service program (a major ongoing agency activity) or other agency activity (e.g., training program, workshop, seminar, special events), no comparable standards or guidelines exist for setting fees. Consequently, fee setting is as much an art as it is a science. The process of fee setting requires that human service administrators apply a variety of financial management concepts and techniques, as well as professional judgment, to determine a fee or fees that best serve the interests of clients, participants, the program or activity, and the agency. Afee can be equal to, greater than, or less than the full cost of a human service program or other agency activity. For example, if a human service program is a revenue center, its fee might be set equal to its full cost. However, if the program is a profit center, its fee would probably be greater than the full cost. If a human service program or other agency activity uses variable fees or a sliding fee scale based on the economic circumstances of clients or participants, the fees paid by at least some clients will be less than the full cost. This chapter discusses several major fee setting issues that human service administrators routinely consider when setting fees for programs and other agency activities. Acase example (a child and family benefits seminar) is then used to demonstrate how these various fee setting issues might be dealt with. Again, the point is stressed that no hard and fast rules exist for fee setting. Rather, fees are arrived at on the basis of the financial…

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