Question

EvansvilleEvansville

Preschool operates a not-for-profit morning preschool that operates

eighteight

months of the year. The preschool has

190190

kids enrolled in its various programs. The preschool's primary expense is payroll. Teachers are paid a flat salary each of the

eighteight

months as follows:

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Requirements

1.	Prepare EvansvilleEvansville Preschool's monthly operating budget. Round all amounts to the nearest dollar.
2.	Using your answer from Requirement 1, create EvansvilleEvansville Preschool's budgeted income statement for the entire eighteight -month school year. You may group all operating expenses together.
3.	EvansvilleEvansville Preschool is a not-for-profit preschool. What might the preschool do with its projected income for the year?

Requirement 1. Prepare

EvansvilleEvansville

Preschool's monthly operating budget. Round all amounts to the nearest dollar. (Round amounts to the nearest dollar.)

Evansville Preschool
Budgeted Monthly Operating Expenses
Teachers' salary:
2-day program
3-day program
4-day program
5-day program
Director salary
Total salary expense
Payroll tax expense
Lease expense
Fixed operating expenses
Variable operating expenses
Total monthly operating expenses

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Salary data

Teachers of two-day program:	$ 428$428 per month
Teachers of three-day program:	$ 657$657 per month
Teachers of four-day program:	$ 856$856 per month
Teachers of five-day program:	$ 1 comma 075$1,075 per month
Preschool director's salary:	$ 1 comma 500$1,500 per month

EvansvilleEvansville

Preschool has

99

two-day program teachers,

44

three-day program teachers,

55

four-day program teachers, and

44

five-day program teachers. The preschool also has a director.

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More Info

In addition to the salary expense, the preschool must pay federal payroll taxes (FICA taxes) in the amount of

7.657.65 %

of salary expense. The preschool leases its facilities from a local church, paying

$ 4 comma 050$4,050

every month it operates. Fixed operating expenses (telephone, Internet access, bookkeeping services, and so forth) amount to

$ 890$890

per month over the

eighteight -month

school year. Variable monthly expenses (over the

eighteight -month

school year) for art supplies and other miscellaneous supplies are

$ 13$13

per child. Revenue for the entire

eighteight -month

school year from tuition, registration fees, and the lunch program is projected to be

$ 241 comma 300$241,300.

Answer 1

1.

Evansville Preschool Monthly Operating expenses

Particulars	Amount(in $)	Amount(in $)	Explanation
Teacher's Salary:
2 day program	3,852		$428*9
3 day program	2,628		$657*4
4 day program	4,280		$856*5
5 day program	4,300		$1,075*4
Director's salary	1,500
Total Salary expense		16,560
Payroll tax Expense		1266.8	$16,560*7.65%
Lease Expense		4,050
Foxed Expense		890
Variable Expense		2,470	$13*190
Total Monthly operating expense		25,236.8

2.

Evansville Preschool's budgeted income statement for the entire eight -month school year.

Particulars	Amount(in $)	Explanation
Revenue from tuition, registration fees, and the lunch	241,300
Operating expenses	202,054.4	(25,236.8*8)
Operating Profit	39,245.6

3. Evansville Preschool is a non profit Organisation , since it has generated operating profits in the current year it can invest the profit in the better infrastructure of the school, it can also invest in providing scholarship to the needy students or provide better educational facilities.

Also if required it can reduce the tuition fees.

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