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.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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.
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
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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