An Application of Break-Even Analysis To Determine the Costs Associated with the Implementation of an Off-Campus Bachelor Degree Completion Program.
Document Type Article
Written by Brian Satterlee while he worked as Dean of Adult and Continuing Education at Warner Southern College.
This paper applies the management science tool of break-even analysis to determine the costs of implementing an off-campus bachelor degree completion program at a four-year private liberal arts college. The first section describes break-even analysis which, in this application, is calculated by dividing the total annual cost for a cohort of students by the annual tuition paid by one student and then applied to decisions concerning off-campus location program expansions or terminations. The next section describes the particular organizational setting for this application which is Warner Southern College (Florida), a small four-year private liberal arts college, and specifically, the college's School of Adult and Continuing Education's major in Organizational Management. The third section applies break-even analysis to the program which involved developing a spreadsheet to assist in determining the break-even point for each location. As a result of the study an administrative decision was made to continue offering the program at all seven locations.