2-B2 Basic CVP Analysis Peter Landis opened his own small day care facility, Toys 'N Tots...
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2-B2 Basic CVP Analysis Peter Landis opened his own small day care facility, Toys 'N Tots (TNT), just over 2 years ago. After a rocky start, TNT has been thriving. Peter is now preparing a budget for November 19X6. Monthly fixed costs for TNT are Rent Required $ 800 Salaries 1,400 Other fixed costs i Total fixed costs 100 $2,300 The salary is for Lynn McGraw, the only employee, who works with Peter in caring for the children. Peter does not pay himself a salary, but he receives the excess of revenues over costs each month. The cost driver for variable costs is "child-days." One child-day is one day in day care for one child, and the variable cost is $10 per child-day. The facility is open 6:00 AM. to 6:00 P.M. weekdays (ie., Monday through Friday), and there are 22 weekdays in November 19X6. An average day has & children attending TNT. State law prohibits TNT from having more than 14 children, a limit it has never reached. Peter charges $30 per day per child, regardless of how long the child is at TNT. 1. Suppose attendance for November 19X6 is equal to the average, resulting in 22 x 8 = 176 child-days. What amount will Peter have left after paying all his expenses? 2. Suppose both costs and attendance are difficult to predict Compute the amount Ap Apr 2-B2 Basic CVP Analysis Peter Landis opened his own small day care facility, Toys 'N Tots (TNT), just over 2 years ago. After a rocky start, TNT has been thriving. Peter is now preparing a budget for November 19X6. Monthly fixed costs for TNT are Rent Required $ 800 Salaries 1,400 Other fixed costs i Total fixed costs 100 $2,300 The salary is for Lynn McGraw, the only employee, who works with Peter in caring for the children. Peter does not pay himself a salary, but he receives the excess of revenues over costs each month. The cost driver for variable costs is "child-days." One child-day is one day in day care for one child, and the variable cost is $10 per child-day. The facility is open 6:00 AM. to 6:00 P.M. weekdays (ie., Monday through Friday), and there are 22 weekdays in November 19X6. An average day has & children attending TNT. State law prohibits TNT from having more than 14 children, a limit it has never reached. Peter charges $30 per day per child, regardless of how long the child is at TNT. 1. Suppose attendance for November 19X6 is equal to the average, resulting in 22 x 8 = 176 child-days. What amount will Peter have left after paying all his expenses? 2. Suppose both costs and attendance are difficult to predict Compute the amount Ap Apr
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