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Specifically, Mr. Schaefer wants you to do the following: PART 1. Prepare a cost-volume-profit (CVP) analysis of the proposal's financial implications. 1. Specifically, prepare an analysis that includes the projected revenue, variable costs, and fixed costs for enrollment levels of 20, 25, 30 and 37 students using the monthly projections in Attachment A of the case. 2. Then, compute the weighted average contribution margin (CM) per student (computed as the total CM divided by the number of students enrolled) and 3. The number of students that need to enroll at each of the four levels of enrollment for the center to break even. For this analysis, I have provided an Excel template in which I have already sorted variable and fixed costs: I have included the raw data. Note: Your enrollment information has already been weighted so you will not need to calculate weights for your weighted average CM.

Specifically, Mr. Schaefer wants you to do the following: PART 1. Prepare a cost-volume-profit (CVP) analysis of the proposal's financial implications. 1. Specifically, prepare an analysis that includes the projected revenue, variable costs, and fixed costs for enrollment levels of 20, 25, 30 and 37 students using the monthly projections in Attachment A of the case. 2. Then, compute the weighted average contribution margin (CM) per student (computed as the total CM divided by the number of students enrolled) and 3. The number of students that need to enroll at each of the four levels of enrollment for the center to break even. For this analysis, I have provided an Excel template in which I have already sorted variable and fixed costs: I have included the raw data. Note: Your enrollment information has already been weighted so you will not need to calculate weights for your weighted average CM.

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 89E: Ratio Analysis Rising Stars Academy provided the following information on its 2019 balance sheet and...
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Specifically, Mr. Schaefer wants you to do the following:

PART 1. Prepare a cost-volume-profit (CVP) analysis of the proposal's financial implications.

1. Specifically, prepare an analysis that includes the projected revenue, variable costs, and fixed costs for enrollment levels of 20, 25, 30 and 37 students using the monthly projections in Attachment A of the case.

2. Then, compute the weighted average contribution margin (CM) per student (computed as the total CM divided by the number of students enrolled) and

3. The number of students that need to enroll at each of the four levels of enrollment for the center to break even. For this analysis, I have provided an Excel template in which I have already sorted variable and fixed costs: I have included the raw data. Note: Your enrollment information has already been weighted so you will not need to calculate weights for your weighted average CM.

Analysis of Financial Projections With Given Case Data Total Number of Students 20 25 30 37 Revenue: 3,400 4,250 5,383 12-3 year olds (S17 per day x 250/12 x 80%) 4-5 year olds ($16 per day x 250/12 x 80%) 5 year olds (S7 per day x 250/12 x 80%) 2,550 1,333 1,867 2,400 3,200 700 700 700 700 Total revenue Variable costs: 8102 Educational supplies (S3 per student) 60 75 90 111 8103 Recreational supplies (S2 per student) 40 50 60 74 8105 Housekeeping supplies ($2 per student) 8201 Administrative expense (14% of total revenue) Total variable costs Contribution margin (CM) Fixed costs: 40 50 60 74 642 835 1,029 1,300 5,402 1,050 7000 Salaries, total 3,126 4,665 3,928 700 7103 Employee benefits 7201 8001 so04 175 875 239 300 357 413 FICA taxes Employee fees paid Staff development training Help wanted ads Membership in other organizations Medical/first aid kit supplies 11 11 16 16 33 33 33 33 8005 6. 9 8010 4 4 4 4. 8101 3. 8104 8106 Food and beverage supplied by USDA Office supplies Telephone expense Postage 5. 10 10 8111 140 140 140 140 8112 8401 8402 Equipment maintenance 8404 8406 25 25 30 30 Rent 22 22 22 22 Mortgage/note/loan interest Utilities, total General insurance 240 240 240 240 8501 92 92 92 92 8502 Workmen's compensation 10 13 15 19
Transcribed Image Text:Analysis of Financial Projections With Given Case Data Total Number of Students 20 25 30 37 Revenue: 3,400 4,250 5,383 12-3 year olds (S17 per day x 250/12 x 80%) 4-5 year olds ($16 per day x 250/12 x 80%) 5 year olds (S7 per day x 250/12 x 80%) 2,550 1,333 1,867 2,400 3,200 700 700 700 700 Total revenue Variable costs: 8102 Educational supplies (S3 per student) 60 75 90 111 8103 Recreational supplies (S2 per student) 40 50 60 74 8105 Housekeeping supplies ($2 per student) 8201 Administrative expense (14% of total revenue) Total variable costs Contribution margin (CM) Fixed costs: 40 50 60 74 642 835 1,029 1,300 5,402 1,050 7000 Salaries, total 3,126 4,665 3,928 700 7103 Employee benefits 7201 8001 so04 175 875 239 300 357 413 FICA taxes Employee fees paid Staff development training Help wanted ads Membership in other organizations Medical/first aid kit supplies 11 11 16 16 33 33 33 33 8005 6. 9 8010 4 4 4 4. 8101 3. 8104 8106 Food and beverage supplied by USDA Office supplies Telephone expense Postage 5. 10 10 8111 140 140 140 140 8112 8401 8402 Equipment maintenance 8404 8406 25 25 30 30 Rent 22 22 22 22 Mortgage/note/loan interest Utilities, total General insurance 240 240 240 240 8501 92 92 92 92 8502 Workmen's compensation 10 13 15 19
835 1,029 1,300 642 Administrative expense (1496 of total revenue) 8201 Total variable costs Contribution margin (CM) Fixed costs: 7000 7103 7201 3,126 3,928 4,665 5,402 Salaries, total 175 700 875 1,050 Employee benefits FICA taxes 239 300 357 413 11 11 16 16 Employee fees paid Staff development training Help wanted ads Membership in other organizations Medical/first aid kit supplies Food and beverage supplied by USDA Office supplies Telephone expense Postage 8001 8004 8005 33 33 33 33 6. 9. 9. 4. 4. 4. 4. 8010 3. 3. 3. 8101 8104 8106 10 10 140 140 140 140 8111 25 25 30 30 8112 Rent 8401 8402 Equipment maintenance 8404 8406 22 22 22 22 Mortgage/note/loan interest Utilities, total 240 240 240 240 92 92 92 92 8501 General insurance 13 15 19 Workmen's compensation Outside printing 10 8502 25 25 25 25 8601 2. 8606 Subscriptions and publications 8702 8706 12 45 45 45 45 Van maintenance/insurance/gas Staff mileage Miscellaneous expenses 48 48 48 48 10 10 10 10 9402 0. 9500 Depreciation Total fixed costs Total variable and fixed costs Operating profit (loss) Weighted average CM per student Number of students needed to break even Round up break-even students Total CM without administrative fee Weighted average CM per student w/o admin. fee Breakeven number of students w/o admin. fee Round up break even students
Transcribed Image Text:835 1,029 1,300 642 Administrative expense (1496 of total revenue) 8201 Total variable costs Contribution margin (CM) Fixed costs: 7000 7103 7201 3,126 3,928 4,665 5,402 Salaries, total 175 700 875 1,050 Employee benefits FICA taxes 239 300 357 413 11 11 16 16 Employee fees paid Staff development training Help wanted ads Membership in other organizations Medical/first aid kit supplies Food and beverage supplied by USDA Office supplies Telephone expense Postage 8001 8004 8005 33 33 33 33 6. 9. 9. 4. 4. 4. 4. 8010 3. 3. 3. 8101 8104 8106 10 10 140 140 140 140 8111 25 25 30 30 8112 Rent 8401 8402 Equipment maintenance 8404 8406 22 22 22 22 Mortgage/note/loan interest Utilities, total 240 240 240 240 92 92 92 92 8501 General insurance 13 15 19 Workmen's compensation Outside printing 10 8502 25 25 25 25 8601 2. 8606 Subscriptions and publications 8702 8706 12 45 45 45 45 Van maintenance/insurance/gas Staff mileage Miscellaneous expenses 48 48 48 48 10 10 10 10 9402 0. 9500 Depreciation Total fixed costs Total variable and fixed costs Operating profit (loss) Weighted average CM per student Number of students needed to break even Round up break-even students Total CM without administrative fee Weighted average CM per student w/o admin. fee Breakeven number of students w/o admin. fee Round up break even students
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