--- title: Cost Analysis of Courses description: pricing, cost analysis --- [LERN Club Sign-In](http://beta.lern.org/club/) [![lern-logo.png](https://blog.lern.com/hubfs/June-folder/lern-logo.png "lern-logo.png")](http://lern.org) ** # Questions # Cost Analysis of Courses May 12, 2018 1:01:45 PM by LERN | Q: I am looking for a sample formula to analyze individual classes on a cost benefit analysis. Is there such a beast?            A: Yes, there is indeed such a beast. First, you must determine the promotion costs for the course. Let's say it costs $10,000 to print and mail your catalog. You print and mail 20,000 catalogs, so it costs .50 to print and mail one catalog. ($10,000/ 20000 catalogs). Assume you have 200 courses in your catalog. If you have 200 courses and 20 pages, then you have 10 courses per page. Each page costs 2.5 cents (.50/20) and each course costs .0025 cents (.025/10). Therefore, it costs .0025 x 20,000 or $50 to promote one course. Next determine your production costs. This includes your instructor pay and any other costs associated with providing the course. Let's say you are paying the instructor $250 and there are $50 in materials fees which you have paid. The total production costs then, are $300. The total of your promotion costs and production costs is $350. Now, your promotion costs should be somewhere between 10% and 15% of your total income from the course. The production costs should be between 35% and 40%. Combined, the total of your production and promotion costs should not exceed 50% of your income for the course. Once you subtract the promotion and production costs, you should have 50% of the income remaining to cover your general and administrative costs (staff salaries, etc). The amount left after deducting promotion and production costs is your operating margin, and the benchmark is 50%. Of course, overall, your program should produce a 50% operating margin. This means some courses will do better than this, and some will do worse. By looking the the performance on a course by course basis, you can tell exactly which courses are making money and which are not. Sometimes, if promotion or production costs are too high, the income from a specific course may be higher than some others, but the operating margin will be lower. By using this analysis, you can always know just how each course is performing. For your open enrollment and continuing professional education courses, the operating margin should be in the 40% to 50% range. 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