Wings Institute of Air-hostess training has reserved a spacious training hall for 25,000 on a weekly basis with a seating capacity of 320 trainees.…
CA Intermediate · Cost and Management Accounting · PYQS · January 2026
Wings Institute of Air-hostess training has reserved a spacious training hall for 25,000 on a weekly basis with a seating capacity of 320 trainees. The institute has designed an intensive training schedule comprising 3 training session per day, 5 days a week for 25 weeks, on aviation and hospitability. Training delivered by the lead trainer to whom a honorarium of 3,600 per training session is paid. In addition, she receives travel reimbursement of 500 per day and refreshments costing - 1,200 per week to maintain comfort and focus during sessions. She also takes 2 lectures per week on safety and customer services during weekends only at 5,000 per lecture (inclusive of travelling and refreshment expenses), ensuring complete coverage of aviation education. Trainee support services covering utilities and essential training aids amount to 2,020 per week. You are required to: (i) Calculate the total cost per training batch. (ii) Determine the minimum training fee per trainee in a batch to cover costs, if the batch is fully occupied. (iii) If the institute targets 20% profit margin on the training fee and decides to charge - 14,800 per trainee, then calculate minimum percentage of batch size to be filled.
Suggested Answer and Working Notes:
(i) Calculation of Total cost per batch Particulars Amount (₹) Hall Charges (₹ 25,000 x 25) 6,25,000 Honorarium of instructor (₹ 3,600 x 3 x 5 x 25) 13,50,000 Reimbursement of travel expenses (500x 5 x 25) 62,500 Refreshment (₹ 1,200 x 25) 30,000 Lectures on Weekends (₹ 5,000 x 2 x 25) 250000 Administrative and miscellaneous expenses (₹ 2,020 x 25) 50,500 Total Cost 23,68,000 No. of Batches 1 Total cost per batch 23,68,000 (ii) Minimum fee per student in a batch to cover costs Total cost per batch / Students per batch = 23,68,000 / 320 = 7,400 (iii) Total Fee to be recovered to achieve 20% profit margin on the fee = 23,68,000 + (₹ 23,68,000 x 1/5th of sales or 1/4rd of the cost) = 29,60,000 Total Fee per batch / Students per batch = 14,800 29,60,000 / Students per batch = 14,800 Students per batch = 200 Minimum % of batch size to be filled to charge - 14,800 per trainee = 200/320 = 62.5%
Topics: Service Costing
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