Question 1(10 marks) Armidale Council provides a bus service for senion citizens and is concerned about the costs of running this service. The Council receives a $150,000 grant each year from a consortium of local organisations in support of the service. The Council expects to spend $2,500 each year to pay for supplies to operate the service Insurance will cost the Council $1,750 per year for each of the two buses that it operates. The Council employs a supervisor to run the bus service. There are also six part-time coordinators that organise the routing of the buses and provide outreach to the senior community. Each coordinator works an average of 17 hours per week for 50 weeks in the year Supervisor Coordinator $46,000 per year $20 per hour All drivers are volunteers. The costs associated with carrying each passenger are S0.35 per kilometre. The average ride for each passenger is 5 kilometres. Seniors are asked to donate $0.75 for each ride, but only 80 percent of them can afford the donation. Required: Prepare an operating budget for the upcoming year, assuming 5,000 seniors use the bus service during the year. In the past, there have been fluctuations in the number of seniors using this service so the Council would also like to see what would happen should there be a 10% increase or decrease in the number of rides. What profit or loss would be made under each scenario? What would be the financial outcome if only 50% of the seniors can donate for their ride? (3 marks) Write a brief report to the Council about the financial costs of running the bus service. What recommendations would you make to ensure the future viability of this service? You are told that the Council does not want this service to run at a loss. (7 marks)