1. Cost Benefit Analysis Example
The first item of the scope of this presentation

2. Cost-Benefit Analysis
Cost of Training
Projected Savings

3. Cost of Training
Costs of supervisors’ time
Costs of instructors’ time
Costs of teaching materials
Costs of classroom-use

4. Costs of Supervisors’ Time - $1,296,000
18 hours training per supervisor
Average supervisor costing rate is $120/hour
600 x 18 x 120 = $1,296,000

5. Costs of Instructors’ Time
* Preparation time
* Classroom time

6. Cost of Instructors’ Preparation Time- $10, 800
3 hours preparation per hour of instruction
18 hours of instruction
Average costing rate per hour per instructor = $200
Calculations: 3 x 18 x 200 = $10, 800

7. Cost of Instructors’ Classroom Time - $72,000
600 supervisors divided by 30 supervisors/session = 20 sessions to teach
18 hours/session
Costing rate of $200/ hour/instructor
Calculations: 20 x 18 x $200 = $72,000

8. Total Costs of Instructors’ Time $82,800
* $ 10,800 Preparation time
* $ 72,000 Classroom time
$ 82,800 Total

9. Total time Costs - $1,378,800 $1,296,000 Supervisors’ time cost
$ 82,800 Instructors’ time costs
$1,378,800 Total

10. Direct Costs Cost of teaching materials Off-site training costs
Classroom Rental
Meals, break items.

11. Costs of Teaching Materials - $2100.00
Handouts:
50 copies/supervisor
600 supervisors
$0.03 per copy
Calculations: 50 x 600 x $0.03 = $900
Other materials (Pens, notepad) = $1200
Total $2100

12. Off-site Training Costs
Classroom Rental
Meals, soft drinks, and snacks.
It's important that the training not be conducted on site so that supervisors and instructors are not interrupted by business problems.
No cell phones will be allowed.

13. Cost of Off-site Classes- Classroom Rental = $4000.00
Classroom Rental Cost
20 2 days per session = 40 days
Classroom rental is $100/day
Calculations: 40 x $100 = $ 4000

14. Cost of Meals, etc. - $18,600
$15.00 per lunch includes cost of break items (coffee, soft drinks, snacks)
600 supervisors
2 lunches per supervisor
Calculations: $15 x 600 x 2 = $18,000
Instructors’ lunches 40 x $15= $600
Total $18,600

15. Off-site Training Costs- $22,600
$ 4,000 Classroom Rental
$18,600 Meals, soft drinks, and snacks.
$22,600 Total
These are the total direct costs

16. Total Direct Costs = $24,700.00
$ 2, Total cost of teaching materials
$22, Total off-site costs
$24, Total direct training costs

17. Total Costs - $1,401,400 $1,296,000 Total supervisors’ time costs
$82,800 Total instructors’ time
$24,700 Total direct costs
$1,402,500 Total cost of training

18. Estimated Cost Savings

19. Benefits-to-Costs Ratios

20. An Investment of $1. 82 Million in the First Four Years Yields $41
An Investment of $1.82 Million in the First Four Years Yields $41.9 Million Return
Benefit-Cost Ratio= 23 to 1
($41.9 M/$1.82M)

21. Objective of Proposal Request authorization for:
$ ,700 in direct costs
$1,378,800 in time costs
$1,403,500 total cost