The Mead Meals on Wheels Center (MMWC) provides meals every day to the homebound elderly. The city of Wabash pays MMWC $32 per week for each person it serves. There is no shortage of demand for MMWC's services among the elderly citizens of Wabash, and MMWC can find qualified recipients for as many meals as it can deliver. Each person helped by MMWC receives two hot meals per day, seven days per week, for a total of 14 meals every week. To service the contract, MMWC has a central kitchen that has the capacity to produce a maximum of 9,600 meals per day. It costs MMWC an average of $36,000 per week to operate the kitchen and other central facilities regardless of the number of meals that MMWC serves. This covers all of MMWC's fixed costs (e.g., rent, equipment costs, and its personnel including administrative staff) as well as its fixed seasonal service contract costs (utilities, snow removal, etc.). The first problem that MMWC faces is figuring out how much it can afford to spend per person, per week for food to supply the program. Food is MMWC's only variable expense. You are MMWC's only program analyst. Question 2: Prepare a budget for the next four quarters of operation for the executive director and summarize it for the full year. The first quarter of operation was in the midst of a very severe winter. As a result, MMWC was only able to get food to 4,600 people per week on average. In addition, the cold weather and snow caused MMWC to exceed the limits of its snowplowing and heating oil contracts. As a result, MMWC's fixed costs were $2,000 per week above what you had forecast. Luckily, a food purveyor from outside the Wabash city limits responded to MMWC's request for bids just before the quarter began and gave MMWC a bid that was $.75 (seventy-five cents) per person-week below the quote that was used in your budget. That is a full $1.25 below the break-even level that you calculated. The executive director knows that something has happened because the budgeted numbers and the actual results that she sees on her quarterly operating statement don't match. She wants you to tell her why