Situation $0$

You are the director of South Bend Day Care Center, which is a not$-$for$-$profit organization. The Center provides the most affordable daycare service to children in South Bend.

Situation $1$

South Bend Day Care Center currently charges each child who comes to the program $$300$ per month. The cost of supplies and snacks that the Center purchases for each child is $$100.$ The Center pays a rent, $$1,000,$ per month.

$(1)$ Calculate a contribution margin $($CM$).$ Show how you calculated a CM$.$

$(2)$ How many children have to come to the Center each month for it to break even? Show how you calculated the number of children. Interpret the result.

Situation $2$

You got a notice from the building owner. The notice says that the Center should pay an increased rent, $$1,200,$ from next year.

$(3)$ How many children have to come to the Center each month for it to break even next year?

Show how you calculated the number of children.

$(4)$ However, you expect that the number of children who come to the Center will not be changed

next year. Therefore, how much should the Center charge each child for it to break even next

year given the increased rent? Show how you calculated a monthly daycare fee. Interpret the

result.

Situation $3$

To understand the cost and revenue structure of the Center this year, you want to visualize the cost and revenue data of the Center.

$(5)$ Using Situation $1,$ develop cost and revenue data set by filling out the Excel worksheet $($i$.$e$.,$ the Template$\_$Cost Structure$).$ Show the data set. Does the completed data set confirm your answer to question $(2)?$ Why or why not?

$(6)$ As we did in class, visualize cost structure using the data set you have created. Show the Chart. Does the Chart also confirm your answer to question $(2)?$ Why or why not?