Greatland

Preschool operates a not-for-profit morning preschool that operates

nine

months of the year. The preschool has

164

kids enrolled in its various programs. The preschool's primary expense is payroll. Teachers are paid a flat salary each of the

nine

months as follows:

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Requirements

1.	Prepare Greatland Preschool's monthly operating budget. Round all amounts to the nearest dollar.
2.	Using your answer from Requirement 1, create Greatland Preschool's budgeted income statement for the entire nine-month school year. You may group all operating expenses together.
3.	Greatland Preschool is a not-for-profit preschool. What might the preschool do with its projected income for the year?

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Part 1

Requirement 1. Prepare

Greatland

Preschool's monthly operating budget. Round all amounts to the nearest dollar. (Round amounts to the nearest dollar.)

Greatland Preschool
Budgeted Monthly Operating Expenses
Teachers' salary:
2-day program
3-day program
4-day program
5-day program
Director salary
Total salary expense
Payroll tax expense
Lease expense
Fixed operating expenses
Variable operating expenses
Total monthly operating expenses

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Teachers of two-day program:	$442 per month
Teachers of three-day program:	$646 per month
Teachers of four-day program:	$860 per month
Teachers of five-day program:	$1,040 per month
Preschool director's salary:	$1,250 per month

Greatland

Preschool has 8 two-day program teachers, 6 three-day program teachers, 4 four-day program teachers, and 4 five-day program teachers. The preschool also has a director.

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in addition to the salary expense, the preschool must pay federal payroll taxes (FICA taxes) in the amount of 7.65% of salary expense. The preschool leases its facilities from a local church, paying $4,080 every month it operates. Fixed operating expenses (telephone, internet access, bookkeeping services, and so forth) amount to $910 per month over the nine-month school year. Variable monthly expenses (over the nine-month school year) for art supplies and other miscellaneous supplies are $11 per child. Revenue for the entire nine-month school year from tuition, registration fees, and the lunch program is projected to be $246,400.