Chapter 19; Pricing Program Services

Question 1

Step 5 of pricing is to perform cost-volume-profit analysis, what happens in this analysis? (also called break even analysis or contribution margin theory)

Answer 1

complete financial analysis of the expected financial results
programmer matches expenses with revenues
determine price to charge

Question 2

what are the 3 parts of classifying costs?

Answer 2

Variable costs
fixed costs
changing fixed costs

Question 3

what are variable costs?

Answer 3

change directly with the change in volume

Question 4

what are fixed costs?

Answer 4

costs that don’t change with changes in volume (can bbs direct or indirect)

Question 5

what is changing fixed costs?

Answer 5

change with change in volume or number of participants but no change in amount for each participant added

Question 6

Step 6 of pricing is establish a price, what happens?

Answer 6

this is determined by the agency pricing policy as well as analyzing the costs associated for the program - financial equations: revenues - expenses = net profit, expenses - revenues = net loss

Question 7

What are a few revenue sources?

Answer 7

entrance fees, 
user fee
rental fee
tax dollars
fundraising
grants
gifts & donations
volunteers
sponsorships
partnerships