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© 2014 Pacific Crest
117
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Ch 2
1
Your club is creating a fund-raising project and you are their quantitative analyst. Pick an idea for
fund-raising (a real-world example is painting mailboxes to raise money for the World-Hunger
Campaign; the cost was $5, $10, or $20, based upon the complexity of the design). Identify the
target revenue for the fund-raising to be both successful and wildly successful (two different
targets). First identify the unit sale (the product or service are you selling). Then calculate your
fixed costs: What are all the investment costs needed to do conduct this fund-raising operation,
no matter how many units are sold to be performed or sold? Finally, identify all the direct costs
associated with the delivering of each unit sold. The club asks that you provide the break even
analysis equation to determine the following: How many units do we need to sell so that no
money was lost? How many units do we need to sell to be successful? How many units do we
need to sell to be wildly successful? Additionally, they ask how much time (in hours) it will take
to reach the break even point, to be successful, and to be wildly successful. Last but not least,
they want you to determine how effective the club would be (net revenue per hour) at each of the
points of interest: break even, successful, and wildly successful.
Notes