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Requirements Respond to the following Case Discussion Questions to help James and Mary make their decisions. Case Discussion Questions (If necessary, the Johnsons will use
Requirements Respond to the following Case Discussion Questions to help James and Mary make their decisions. Case Discussion Questions (If necessary, the Johnsons will use straight line depreciation. For monthly calculations, use 4.33 weeks per month.) 1. Consider the different types of costs discussed in this course. List the costs discussed in the case and provide one specific example of each. EXAMPLE Cost Fixed Cost Specific Example Annual license fee of $225. The license fee does not change regardless of the couples activities. 2. Based on the information provided, what information is relevant to the decision to purchase the appliances? What information is irrelevant to the decision to purchase the appliances? Why? 3. What could it cost the couple to launder clothes? Show your detailed calculations for each. 4. The couple has made a significant investment in this business. How long will it take for the couple to recoup their investment? Is the time required to recoup the investment a good measure of the success of the company? If not, how would you measure the success of the company? Explain. 5. Prepare a letter to the Johnsons advising them on their laundry needs. What is your recommendation and why? 6. The Johnsons have a wait list for their daycare. They can hire an employee for $9 per hour for 40 hours each week. With the additional employee, the Johnsons can accept three additional children. Should the Johnsons hire the additional employee? Show your detailed calculations. 7. The Johnsons home can accommodate a maximum of nine children. They can move the daycare from their home to rented space in town, which can accommodate up to 14 children. The space will cost $650 per month and the utilities will cost $125 per month. Additionally, insurance will now cost the Johnsons $5,000 per year. Per state regulations, each adult can supervise no more than three children. Prepare a letter to the Johnsons advising them on their space options. Should they continue to operate the facility at home or should they rent space in town? How many children should they accept? How many employees will they need to hire? Show your detailed calculations for each scenario. Requirements Respond to the following Case Discussion Questions to help James and Mary make their decisions. Case Discussion Questions (If necessary, the Johnsons will use straight line depreciation. For monthly calculations, use 4.33 weeks per month.) 1. Consider the different types of costs discussed in this course. List the costs discussed in the case and provide one specific example of each. EXAMPLE Cost Fixed Cost Specific Example Annual license fee of $225. The license fee does not change regardless of the couples activities. 2. Based on the information provided, what information is relevant to the decision to purchase the appliances? What information is irrelevant to the decision to purchase the appliances? Why? 3. What could it cost the couple to launder clothes? Show your detailed calculations for each. 4. The couple has made a significant investment in this business. How long will it take for the couple to recoup their investment? Is the time required to recoup the investment a good measure of the success of the company? If not, how would you measure the success of the company? Explain. 5. Prepare a letter to the Johnsons advising them on their laundry needs. What is your recommendation and why? 6. The Johnsons have a wait list for their daycare. They can hire an employee for $9 per hour for 40 hours each week. With the additional employee, the Johnsons can accept three additional children. Should the Johnsons hire the additional employee? Show your detailed calculations. 7. The Johnsons home can accommodate a maximum of nine children. They can move the daycare from their home to rented space in town, which can accommodate up to 14 children. The space will cost $650 per month and the utilities will cost $125 per month. Additionally, insurance will now cost the Johnsons $5,000 per year. Per state regulations, each adult can supervise no more than three children. Prepare a letter to the Johnsons advising them on their space options. Should they continue to operate the facility at home or should they rent space in town? How many children should they accept? How many employees will they need to hire? Show your detailed calculations for each scenario
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