Case 1A Turner Test Prep Co.

Submitted by:
Dexter Dagdag Jerobin Christian Paz Shirley Anne Villanueva Huang Zhuya

Case 1A: Turner Test Prep Co. 1) The fixed costs were abide by Turner Test Prep Co. on an annual basis in spite of the fact that CPA exam prep sessions are held two times a year only, the costs expenses can be categorized into fixed and variable costs. For instance, for breakeven analysis, the business operation should produce sufficient profit to cover up the operating expenses. In the case, the fee schedule per student is $1,100, breakeven point can be state as Fixed Costs + Variable Cost = Profit/Revenue. (Operating Costs for Turner Services) Annual Fixed Costs: Professor salaries (about 1,200 hours per year) Office space Utilities and Insurance Printing Marketing Travel TOTAL Thus: 139200 + 600X = 1100X Solving for X, X = 139200/500 -> 278.4 students annually or 140 students/session for biannual session schedule. So, Jessica Turners breakeven point considering $1,100 in fees per student is at least 140 students/session or 280 students annually to cover for the business expenses without making any profit or gaining a loss. 2) I think that Turner Test Prep Companys competitive advantages lies in recommending the following services:  Live classroom sessions along with audiotapes of the lectures for later review  One-on-one advice sessions with Jessica Turner on a bi-weekly basis to track development The result of these services provided a 100%, 70% and 80% pass rate for the last three sessions. NTC program boasted a 75% pass rate. They should improve their marketing and promote the higher passing rate. NTC has been around for a longer time and unless Turner Test Prep Company advertises its strong unique points, it would be difficult to sway customers away from NTC. 3) To reach greater market share, Jessica Turner needs to enhance the quality of the services considering customers profile and possibly expanding the geographical market to include additional areas in addition to the bay area.

$75/hour $2,000/month $1,000/month $500/month $400/month $200/month

(1,200hours x $75) ($2,000 x 12) ($1,000 x 12) ($500 x 12) ($400 x 12) ($200 x 12)

$ 90,000 $ 24,000 $ 12,000 $ 6,000 $ 4,800 $ 2,400 $139,200