Marcotte and Company organizes seminars and other events for companies and professional associations. Until recently, the firm organized only large events (average of 750 persons each) and had a volume of 20 seminars per year. The past year, the firm increased its scope to include small seminars of 100 persons each as well. While this action increased total expenses to $309,000 per year, Milt Marcotte, the firm’s owner and CEO, believes the action to be profit enhancing. As evidence, he points to the rapid growth of the small seminars (100 persons per seminar, 50 seminars in a year), without cutting into the number of large seminars.

Required:
a. When he only offered large seminars, Milt determined the price to charge the conference organizers by computing a cost per participant and adding a 40% markup.
He continued this scheme even after he included small seminars to the product line. Under this scheme, determine the price per the average large seminar and the average small seminar.
b. One of the seminars Milt organized concerned activity-based costing. Milt caught fragments of the talk and wonders if the lessons apply to him. As a preliminary cut, he figures that costs per participant (doing mailings, preparing nametags, etc.) cost $225,000 per year. The remainder of $84,000 per year relates to coordinating with the hotel and caterers, organizing AV equipment, hanging banners, and so on. Using activity-based costing, determine the price per large seminar and the average small seminar.