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Dan Schaefer, executive director of the Petersburg, VA, office of the Volunteers of America (VOA), is eager for the board of directors to approve his

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Dan Schaefer, executive director of the Petersburg, VA, office of the Volunteers of America (VOA), is eager for the board of directors to approve his plan to open a day-care center in the Alta Vista housing community. Mr. Schaefer believes this proposal is an ideal way to begin to rebuild Alta Vista. The Petersburg VOA helped to establish this community in 1971; unfortunately, the residents have seen a rise in criminal activity and a decrease in their quality of life.

Although the board approves Mr. Schaefer's proposal at the end of the case, assumeinsteadthat he has hired you to analyze the proposal in preparation for the board meeting. Specifically, there are three parts to this assignment:

1.Read the case.

2.Make acost-volume-profit (CVP) analysis of the proposal's financial implications. Make 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. Then, compute the average contribution margin (CM) per student (computed as the total CM divided by the number of students enrolled) and 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, but I have not included the formulas.

oWhen you are finished with the CVP analysis,

3.

oDo you think that (a) Dan Schaefer should recommend the proposal or (b) Dan Schaefer shouldnotrecommend the proposal.

oSupport for your statement

image text in transcribed
Home MELA { TELL ME WHEN You Well ` `` #` SHELE 1. 86 Cut _UE` Copy - Times New RO -| 10 -| A A ab Wrap Text General Normal Bad Good [ Autosum - AY\\ Paste |4\\ Fill - *` Format Painter\\ \\B IU - -| } - A - = = = = =\\Merge & Center +\\ Conditional Format as| Neutral Calculation Insert Delete Format\\\\ - Clear - Sort & Find & Formatting - Table - Filter - Select - Clipboard Font Alignment Number Styles Cells Editing A K 45 X for in " HE E H M U HA N \\Analysis of Financial Projections - With Given Case Data\\ 20 - - Total Number of Students - - - 37 4| REVENUE .* \\2- 3 Year Old = 1 $ 7 7 FET day H ZSCHITZ' H EIL` 3 . 4 0101 5 . 3813 - 5 Year Old = 1$ TE FIET day H ZELITZ' H EL` 1.3:3.3 \\. BET LILLE 5 year old = [$ 7 PER day & 250/7Z' H BLIX ! !` Total revenue* }| Variable costs :` BITLIZ Educational SUFFICE !` FIET SILIJEN! BY[I] Fiecreational =UFFlies |$ 2' PER Student!* $70S HOUSEKEE Fina SUFFliE = ! $ 2' FIET Student'!* NEE BIZZY AdministrativE EXPENSE 174` Of total REVENUE* !* Total variable costs* 13010 Contribution margin [MY] TE\\ Fixed costs :` Salaries , total\\ FIZZ EMPLOYEE BENEFIT=\\ 175 10 : 05 FELT FILHIGHEST 201\\ EMPLOYEE FEES Paid Staff development training _HELP wanted add=\\ BUTTO Membership in other organizations* \\BTUT Medicalifirst aid kit SUFFlies $1[14 Food and BEVERAGE SUFFliEd LIL LISILIA \\BILIE LIFTICE SUPPLIES\\ _TELEPHONE EXPERIEE* 28\\ 29\\ EXTZ POSTAGE K E E F B O J M O V E N E N E E N O U N ^ ED BA[IT] ` ` ` GN MEN BONDMEND WAL^ ^ ^ \\8:4LIZ EQUIPMENT Maintenance* Mortgage ingtelloan interest =_ N M BALIE L LUtilities . total GENEISTIMEHISNICE\\ `OrKITIEr" = CONIFERIZATION* \\LIEILIT [lutside Printing\\ \\BEIDIE \\Subscriptions and Publications* \\BILLZ {'anmaintenanceline wrangE `as \\BIRDIE Giraff mile SIZE\\ $34 [12\\ MiscellANEOUS EXFIERISEE* 45 0 0 LEFTEciation\\ Total Fixed costs Total variable and fixed costs Operating profit (loss)| Average [M per student* Number of students needed to break ever _ J ITI LI Round up break- even students* Total [M without administrative fee* Average LM Per student* *10 admin . fee umber of students *10 admin . fee Breakeven number of*$ Round up break - even students* Alta Vista Project Analysis\\ ( 7 ) Ready + 60%6\\ O Type here to search

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