You are planning a 1-day customer service training program for 50 participants. You have been asked to calculate the costs of the program and submit them to the VP of HR for approval. Luckily, the participants and facilitator live locally, so there will be no need for travel or lodging costs. The participants will still continue to receive a day's worth of pay, estimated at $250 per participant for the time they spend in the program. The cost for the facilitator is $1,000 which covers one day of facilitation as well as support before and after the training. Breakfast and lunch will be $1,000 and the classroom will be $500, which includes the use of AV equipment. Training materials will cost $3,200. Overhead costs will be $1500. It cost $6,500 to design and develop the training program, and another $500 to train the facilitator. A coordinator from the customer service department will be assisting with booking the classroom space and shipping the materials to the location - the cost of the coordinator's support will be $500, and shipping costs will be $230.

Calculate all three of the following: (a) the costs of each of the five categories as described in the textbook ( As per the textbook, the five categories are direct costs, indirect costs, development costs, overhead costs, and trainee compensation costs.)

(b) the total training costs and

(c) the cost per participant.

0 $ 1,500 375 0 3,360 600 672 $ 6,507 0 750 187 0 224 TABLE 12.1 TRAINING COST ANALYSIS FOR WOOD PANEL PLANT Direct costs. The travel and per diem cost was zero, DIRECT COSTS because training took place adjacent to the plant. Outside instructor Classroom space and audio-visual equipment were In-house instructor-12 days x $125 a day rented from a local hotel; refreshments were purchased Fringe benefits25 percent of salary at the same hotel. Because different supervisors Travel and per-diem expenses attended the morning and afternoon sessions, lunch Materials --S60 56 participants was not provided. Classroom space and audio-visual equipment12 days * $50 a day RefreshmentsS4 a day 3 days x 56 participants Total direct costs Indirect costs. Clerical and administrative costs INDIRECT COSTS reflect the amount of clerical time spent on making Training management arrangements for the workshop facilities, sending out Clerical and administrative salaries notices to all participants, and preparing class rosters Fringe benefits25 percent of clerical and other miscellaneous materials. and administrative salaries Postage, shipping, and telephone Pre- and post-learning materials -S4 x 56 participants Total indirect costs Development costs. These costs represent the purchase DEVELOPMENT COSTS of the training program from a vendor. Included are Fee to purchase program instructional aids, an instructor manual, videotapes, and Instructor training a licensing fee. The instructor-training costs are for a Registration fee one-week workshop the instructor attended to prepare for Travel and lodging facilitating the training. Front-end assessment costs were Salary covered by the corporate training budget. Benefits (25 percent of salary) Total development costs Overhead costs. These represent the services that OVERHEAD COSTS the general organization provides to the training unit. General organization support Because figures were not available, we used 10 percent 10 percent of direct, indirect, top management's time of the direct, indirect, and program-development costs. and development costs Total overhead costs Compensation for participants. This figure represents COMPENSATION FOR PARTICIPANTS the salaries and benefits paid to all participants while Participants' salaries and benefits they attended the workshop (time away from the job) Total compensation Total training costs Cost per participant $ 1,161 3,600 1,400 975 625 156 $ 6,756 $ 1,444 $ 16,696 $ 32,564 $ 582 R Tento Radhi