Question
Snow LeopardSnow Leopard provides daycare for children Mondays through Fridays. Snow LeopardSnow Leopard charges each parent $ 630$630 per child per month. LOADING... (Click the
Snow LeopardSnow Leopard
provides daycare for children Mondays through Fridays.
Snow LeopardSnow Leopard
charges each parent
$ 630$630
per child per month.
LOADING...
(Click the icon to view the monthly variable per child and fixed costs.)Read the requirements
LOADING...
.
Requirement 1. Calculate the breakeven point.
Determine the formula used to calculate the breakeven quantity, then calculate the number of children that must be enrolled to break even.
| Fixed costs | / | Contribution margin per child | = | Breakeven number of children |
| $6,300 | / | $420 | = | 15 |
Requirement 2.
Snow LeopardSnow Leopard's
target operating income is
$ 10 comma 500$10,500
per month. Compute the number of children who must be enrolled to achieve the target operating income.
Determine the formula used to calculate the quantity required to achieve the target income, then enter the amounts to calculate the number of children who must be enrolled to achieve the target income.
|
|
|
|
|
|
|
| Target |
| ( | Fixed costs | + | Target operating income | ) / | Contribution margin per child | = | quantity |
| ( | $6,300 | + | $10,500 | ) / | $420 | = | 40 |
Requirement 3.
Snow LeopardSnow Leopard
lost its lease and had to move to another building. Monthly rent for the new building is
$ 3 comma 150$3,150.
In addition, at the suggestion of parents,
Snow LeopardSnow Leopard
plans to take children on field trips. Monthly costs of the field trips are
$ 1 comma 400$1,400.
By how much should
Snow LeopardSnow Leopard
increase fees per child to meet the target operating income of
$ 10 comma 500$10,500
per month, assuming the same number of children as in requirement 2?
Determine the formula used to calculate the fee increase per child, then enter the amounts to calculate the increase needed to meet the target operating income.
|
| / |
| = | Increase in fee | |
|
| / |
| = |
| per child |
| Its monthly variable costs per child are as follows: | |
| Lunch and snacks | $155 |
| Educational supplies | 30 |
| Other supplies (paper products, toiletries, etc.) | 25 |
| Total | $210 |
| Monthly fixed costs consist of the following: | |
| Rent | $1,950 |
| Utilities | 200 |
| Insurance | 340 |
| Salaries | 3,060 |
| Miscellaneous | 750 |
| Total | $6,300 |
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
