APPALOOSA COUNTY DAY CARE CENTER, INC.

Florida Memorial UniversityBus 501 Accounting for Management

Fall 2011Dr. Rosalie C. Hallbauer

A. Wesley HemmansMary SaddlerGerald Turner

1. COST AND PROFITABILITY ANALYSIS

• Infant childcare • Toddler childcare• Pre-K childcare • Rent - School district • Rent - Head Start

2A -IDENTIFY DIRECT COSTS

Labor costs are the only direct costs associated with the programs.

• Food costs would be direct costs to the kitchen area but indirect to the end services.

2B- WHICH COSTS WOULD BE ORGANIZATION OR FACILITY

• The costs that would be considered to be organization-sustaining costs include depreciation, building insurance, and interest expense on the mortgage debt.

• Both ACDC and the tenants use the facility and, thus, should participate in the costs associated with acquiring the space.

3. ASSIGN COSTS FROM TABLE 2

• Occupancy costs – Indirect • Employee Support costs

• General & Administrative costs • Program Support costs

• Occupancy costs – Building Usage • Wage Expenses – Direct

4. IDENTIFY THE COST DRIVERS THAT HAVE A CAUSAL RELATIONSHIP

Cost Pool Cost Driver

Occupancy costs–Indirect Square footage

Employee support costs Number of ACDC program employees*

General & administrative costs Total number of children enrolled

Program support costs Total daily population at ACDC*

Occupancy costs–Building usage

Total daily population in building*

Wages expenses–Direct Number of employees assigned to rooms

5. COST-DRIVER

Cost Pool Total Cost Driver Capacity

Activity Rate

Occupancy – Indirect $ 25,745 8,000 $ 3.22

Employee costs 850 12 70.83

General & admin. costs 22,295 78 285.83

Program costs 18,955 59 321.27

Occupancy—Building usage 13,850 123 112.60

Wages – Direct 94,255

Total Cost $175,950

6-REVENUE AND COST ASSIGNMENTS

Pool Costs

Activity Rate

Infant Care

Toddler Care Pre- K Care

School District Head Start Total

$28,530

$68,710

$4,200

$6,360

$107,800

Revenues

1 Square Footage 25,745

$ 3.22

850

2,735

1375

4,425 1375

4,425 1750

5,632 2650

8,528 8000

25,745

2 Total number of staff

850

$ 70.83 3

213 5

354 4

283 0

- 0

- 12

850

3 Total number of children

22,295

$ 285.83 11

3,144 35

10,004 32

9,147 0

- 0

- 78

22,295

4 Avg daily staff/child pop

18,955

$ 321.27 10

3,213 26

8,353 23

7,389 0

- 0

- 59

18,955

5 Avg pop of programs

13,850

$ 112.60 10

1,126 26

2,928 23

2,590 18

2,027 46

5,180 123

13,850

6 Wage- direct allocation

94,255

20,915

41,830

31,510    

94,255

Total costs

31,346  

67,894  

55,344  

7,659  

13,708  

175,950

($2,816)  $816  

$7,306  

($3,459) 

($7,438)  ($5,500)

Net income/(loss) per Prog

7A-PROFITABLE PROGRAMS

• Toddler care

• Pre-K care.

7B- UNPROFITABLE PROGRAMS

• Infant care

• School district tenant

• Head Start tenant

IMPROVING PROFITABILITY

• The center could raise the childcare rate of the infant care.

• The center could eliminate the infant care program

• Another possible action is to raise the rates for the leased rooms.