The goal of this exercise is to formalize the cost structure of a project, to prepare costs and revenues based on varying qualities of goods and services to be provided and to locate the break-even point. Please sketch costs, revenues and a break even point on a sheet.

Exercise: Your team launches semi-private piano classes in California Public Schools. The goal is to improve music skills of the children and enhance their learning in math. The schools will provide you with free classroom space. Revenue costs consists of tuition paid by the parents (50%) and a private foundation grant (the remaining 50%, maximum total grant - $100,000). Locate fixed costs, variable costs, and total costs at different quantity levels. Determine the price of a piano lesson. Graph the costs and revenues. Locate the break-even point. What is the relevant range for your estimation?
Also think of three other issues that ought to be considered for this project besides costs and revenue sketched on your sheet.

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