Budget:

Actual data:

Need to calculate the forecast :

	Actual Quarter 1	Actual Quarter 2	Forecast Quarter 3	Forecast Quarter 4	Forecast Total Year
FTEs	25	28	36	34	31
Revenue	$64,042.00	$71,358.00			$317,663.00
Variable Cost	$27,826.00	$26,911.00
Fixed Cost	$39,906.00	$40,182.00
Total Cost	$67,732.00	$67,093.00
Net Income	$(3,690.00)	$4,625.00
Budget Income	$(676.00)	$6,347.00	$24,097.00	$22,309.00	$52,077.00
Difference	$(3,014.00)	$(2,082.00)

Thank you!

*FTE means full-time-equivalent student here. I have added a screenshot of the introduction.

INTRODUCTION The Sunshine Daycare Center has been in business for a number of years and until recently has been profitable. A few months ago, regional management dismissed a director who had a confrontational style, potentially causing a decrease in attendance. During the former director's employ, many clients were lost and a complete staff turnover occurred. The new director, fresh out of college, is enthusiastic and energetic, and while experienced in daycare operations, has no business training other than the three-day course she was given upon taking the job. Your professor has volunteered your class to break into groups of four or five students and serve as consulting teams for the Sunshine Daycare Center, which will be referred to as SDC in the rest of the case. This will give you an opportunity to use some of the skills you are learning in your Management Accounting class. Your team's ultimate goal will be a presentation outlining a strategy for improved profitability for the SDC. To do that, you will need to understand how the business is operating now and decide what areas need improvement. You will need a new forecast of the next two quarters, assuming no change in the current operations. By comparing this to the current yearly plan, you will see how far off the plan the SDC is operating. Now the big challenge: you will choose some of the possible marketing improvements listed in Exhibit 3 to improve the operations of the center. Then incorporate your suggestions into a four-quarter budget for the subsequent fiscal year, 2013-2014. The SDC is open Monday through Friday and provides care for children in the following categories: Infants (ages 0-18 months), Toddlers (ages 18-36 months), Preschool (ages 3-5 years), Kindergarten (ages 6-7 years), and School-Age Children (ages 8-11 years). Children enroll for either full-day or half-day care. Full-time billing rates vary from infants at $262 per week to $127 for school-age children. Half-day rates vary from $183 for toddlers to $89 per week for school- age children. Note that two half-day students equal one full-time-equivalent student (FTE) for headcount purposes. The center is licensed by the state and meets all regulatory requirements for health and safety. The center is located in an affluent community and has four other competitors in a five-mile radius. All centers offer comparable programs, at comparable rates. The challenge to SDC is to increase enrollment. BUDGET Q1 BUDGET Q2 BUDGET Q3 BUDGET 04 BUDGET YEAR Average FTES 31 39 46 45 40 $78,392 $100,333 $118,883 $126,570 $424,178 375 375 375 375 1,500 500 500 79 16,425 534 101 16,425 534 119 16,425 534 126 16,425 534 425 65,700 2,136 1,098 1,772 1,405 650 1,140 1,664 100 1,140 5,939 750 4,560 1,140 1,140 Revenue: Expenses: Advertising/Promotion Appliances Auto Expense Bad Debt HQ Assessments Depreciation Dues & Subscriptions Food & Catering License & Permits Insurance Interest Maintenance & Repair Office Supplies Personnel Postage & Del. Professional Fees Property Tax Rent School Supplies Taxes Telephone Training Travel Utilities Total Expense Net Income (Loss) 3,750 3,750 15,000 300 31,433 3,750 300 45,072 300 46,245 3,750 300 55,405 1,200 178,155 2,745 14,664 600 1,650 1,275 2,745 14,664 600 1.650 1,275 2.745 14,664 600 1.650 1,275 2,745 14,664 600 1,650 1,275 10,980 58,656 2,400 6,600 5,100 500 300 200 3,000 $79,068 $ (676) 3,000 3,000 3,000 12,000 $ 93,986 $ 94,786 $104,261 $ 372,101 $ 6,347 $ 24,097 $ 22,309 $ 52,077 Quarter 1 25 Quarter 2 28 FTES Revenue $64,042 $71,358 14,936 501 14,398 501 1,044 20 1,227 471 124 1,230 Expenses: Advertising/Promo Appliances Auto Expense Bad Debt HQ Assessments Depreciation Dues & Subscriptions Food & Catering License & Permits Insurance Interest Maintenance & Repair Office Supplies Personnel Postage & Del. Professional Fees Property Tax Rent School Expense Taxes Telephone Training Travel Utilities Total Expense Net Income (Loss) 2,251 441 26,782 1,957 446 26,440 1,790 14,664 198 1,983 14,664 213 702 789 640 1,373 100 1,765 $67,732 ($3,690) 3,175 $67,093 $4,265 INTRODUCTION The Sunshine Daycare Center has been in business for a number of years and until recently has been profitable. A few months ago, regional management dismissed a director who had a confrontational style, potentially causing a decrease in attendance. During the former director's employ, many clients were lost and a complete staff turnover occurred. The new director, fresh out of college, is enthusiastic and energetic, and while experienced in daycare operations, has no business training other than the three-day course she was given upon taking the job. Your professor has volunteered your class to break into groups of four or five students and serve as consulting teams for the Sunshine Daycare Center, which will be referred to as SDC in the rest of the case. This will give you an opportunity to use some of the skills you are learning in your Management Accounting class. Your team's ultimate goal will be a presentation outlining a strategy for improved profitability for the SDC. To do that, you will need to understand how the business is operating now and decide what areas need improvement. You will need a new forecast of the next two quarters, assuming no change in the current operations. By comparing this to the current yearly plan, you will see how far off the plan the SDC is operating. Now the big challenge: you will choose some of the possible marketing improvements listed in Exhibit 3 to improve the operations of the center. Then incorporate your suggestions into a four-quarter budget for the subsequent fiscal year, 2013-2014. The SDC is open Monday through Friday and provides care for children in the following categories: Infants (ages 0-18 months), Toddlers (ages 18-36 months), Preschool (ages 3-5 years), Kindergarten (ages 6-7 years), and School-Age Children (ages 8-11 years). Children enroll for either full-day or half-day care. Full-time billing rates vary from infants at $262 per week to $127 for school-age children. Half-day rates vary from $183 for toddlers to $89 per week for school- age children. Note that two half-day students equal one full-time-equivalent student (FTE) for headcount purposes. The center is licensed by the state and meets all regulatory requirements for health and safety. The center is located in an affluent community and has four other competitors in a five-mile radius. All centers offer comparable programs, at comparable rates. The challenge to SDC is to increase enrollment. BUDGET Q1 BUDGET Q2 BUDGET Q3 BUDGET 04 BUDGET YEAR Average FTES 31 39 46 45 40 $78,392 $100,333 $118,883 $126,570 $424,178 375 375 375 375 1,500 500 500 79 16,425 534 101 16,425 534 119 16,425 534 126 16,425 534 425 65,700 2,136 1,098 1,772 1,405 650 1,140 1,664 100 1,140 5,939 750 4,560 1,140 1,140 Revenue: Expenses: Advertising/Promotion Appliances Auto Expense Bad Debt HQ Assessments Depreciation Dues & Subscriptions Food & Catering License & Permits Insurance Interest Maintenance & Repair Office Supplies Personnel Postage & Del. Professional Fees Property Tax Rent School Supplies Taxes Telephone Training Travel Utilities Total Expense Net Income (Loss) 3,750 3,750 15,000 300 31,433 3,750 300 45,072 300 46,245 3,750 300 55,405 1,200 178,155 2,745 14,664 600 1,650 1,275 2,745 14,664 600 1.650 1,275 2.745 14,664 600 1.650 1,275 2,745 14,664 600 1,650 1,275 10,980 58,656 2,400 6,600 5,100 500 300 200 3,000 $79,068 $ (676) 3,000 3,000 3,000 12,000 $ 93,986 $ 94,786 $104,261 $ 372,101 $ 6,347 $ 24,097 $ 22,309 $ 52,077 Quarter 1 25 Quarter 2 28 FTES Revenue $64,042 $71,358 14,936 501 14,398 501 1,044 20 1,227 471 124 1,230 Expenses: Advertising/Promo Appliances Auto Expense Bad Debt HQ Assessments Depreciation Dues & Subscriptions Food & Catering License & Permits Insurance Interest Maintenance & Repair Office Supplies Personnel Postage & Del. Professional Fees Property Tax Rent School Expense Taxes Telephone Training Travel Utilities Total Expense Net Income (Loss) 2,251 441 26,782 1,957 446 26,440 1,790 14,664 198 1,983 14,664 213 702 789 640 1,373 100 1,765 $67,732 ($3,690) 3,175 $67,093 $4,265