Assessing the Costs and Benefits of Telelearning: A Case Study ...

As can be seen in Table 10 over the life of the program (5 years) total revenues are
$114,000 while total costs are $104,190. Therefore, there appears to be a profit of
$9,810. However, overhead costs were unknown and thus not included in this analysis.
If they were, the course would probably just break-even or be slightly under with the
inclusion of these costs.
Annual total costs can be determined as follows:
Total fixed costs ($3,550) averaged over five years are $710 per year. This is the
average annual fixed cost (plus any earlier development and overhead costs that are
unknown). The average fixed costs per student per year is $710/20 = $35.50
Total variable costs per student can be determined by taking the total variable
costs ($100,640) and dividing by the total number of projected students (100). The total
variable cost per student are therefore $1,006.40.
• Total Fixed Costs/5 years = $3,550/5 = $710 average annual fixed cost
(or $35.50 per student)
• Total Variable Costs = $100,640 / 100 (total enrollment) =
$1,006.40/student
therefore, Total Annual Cost per Student = $35.50 + $1,006.40/student
= 1041.9 per student
Total revenue per student can be determined by taking the total revenue
($114,000) and dividing by the total enrollment (100).
Total Revenue = $114,000/100 (total enrollment) = $1,140/student
With a few calculations we can determine that for these projections, the
break-even annual enrollment must be 19 students.
Total Costs (5 years) = $104,190
Average Cost Per Year = $20,838
Average Revenue Per Student = $740 (tuition) + $400 (government grant)
=$1,140
Since breakeven (number of students) = Average Cost Per Year/ Average
Revenue Per Student,
Break-even = $20,838/$1,140 = 18.28 students
The average annual enrollment for this course based on the above projections is
20. Therefore, total annual revenue at 20 students is $22,800 while total annual costs at
20 students is $20,838. Therefore, the annual net profit obtained from this course is
$1,962 (minus the unknown annual overhead costs).
Total Annual Revenue = 20 x $1,140 = $22,800
20