Maple Ridge Preschool operates a not-for-profit morning preschool that operates eight months of the year. The preschool has 165 kids enrolled in its various programs. The preschool’s primary expense is payroll. Teachers are paid a flat salary each of the nine months as follows:

Salary data

Teachers of two-day program …………………………………………………. $ 440 per month

Teachers of three-day program ……………………………………………….. $ 663 per month

Teachers of four-day program …………………………………………………. $ 860 per month

Teachers of five-day program ………………………………………………… $1,060 per month

Preschool director’s salary …………………………………………………….. $1,450 per month

Maple Ridge Preschool has 8 two-day program teachers, 4 three-day program teachers, 5 four-day program teachers, and 3 five-day program teachers. The preschool also has a director.

In addition to the salary expense, Maple Ridge Preschool must pay federal payroll taxes (FICA taxes) in the amount of 7.65% of salary expense. The preschool leases its facilities from a local church, paying $4,060 per month. Fixed operating expenses (telephone, Internet access, bookkeeping services, and so forth) amount to $920 per month over the eight-month school year. Variable monthly expenses (over the eight-month school year) for art supplies and other miscellaneous supplies are $10 per child. Revenue for the entire nine-month school year from tuition, registration fees, and the lunch program is projected to be $230,600.

Requirements

1. Prepare Maple Ridge Preschool’s monthly operating expenses budget. Round all amounts to the nearest dollar.

2. Using your answer from Requirement 1, create Maple Ridge Preschool’s budgeted income statement for the entire nine-month school year. You may group all operating expenses together.

3. Maple Ridge Preschool is a not-for-profit preschool. What might the preschool do with its projected income for the year?



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