KFG Expenses
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LeversNotes
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Production FTE salary$69,500
Best guess at a reasonable salary you would pay someone to produce (import, format, etc.) a digital book or journal?
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Avg. book/journal production hours
10
How many hours each book/journal takes to produce (for journals, this is initial setup)
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Overhead50%
Overhead on the FTE – benefits, vacation, admin, office, etc. Does not include hosting fees, sales, marketing, etc. – ie cost of goods sold.
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CoGS/product$50
Cost of goods sold - includes hosting, sales, marketing, and other non-FTE overhead
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FTE Hours/Year2080
How many hours per year does an FTE work (including vacation, accounted for in overhead)
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Billing margin300%
How much margin will we charge on services?
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OutputsNotes
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Hourly cost w/overhead$50
Total hourly cost for production work
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Avg. book/journal cost$500
Average cost for a book
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Hourly billed rate$150
The rate we'll bill at
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Avg. book/journal price$1,500
The average price of producing a book in this model
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Books/journals to break even70
How many products does the FTE need to produce to cover their salary and non-CoGS overhead?
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FTEs to break even0.34
How much FTE time do we need to get to break even?
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Books/journals at full FTE use208
How many products one worker can produce at full capacity (again, vacation, admin time, training time, etc. included as a cost in overhead)
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Gross revenue at full FTE use$312,000
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Net revenue full FTE use$207,750
Excludes cost of goods sold
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Gross margin at full FTE use67.00%
Excludes cost of goods sold
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Net margin at full FTE use63.25%
Includes cost of goods sold
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Profit at full FTE use$197,350
Includes cost of goods sold
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