Financial analysis of daycare center
Not what you're looking for?
It's close to a $40,000 loser and we ought to devote our efforts elsewhere", noted Kara Whitmore, after reviewing financial reports of her company's attempt to offer a reduced-price daycare service to employees. The daycare's financial figures for the year just ended follow.
Revenues $120,000
Fixed Costs $45,000
Traceable Fixed Costs $89,000
Allocated Corporate Overhead $24,000
If the daycare service/center is closed, 70% of the traceable fixed cost will be avoided. In addition, the company will incur one-time closure costs of $6,800.
Required:
A. Show calculations that support Kara Whitmore's belief that the daycare center lost almost $40,000.
B. Should the center be closed? Show calculations to support your answer.
C. What problem might the company experience if the center is closed?
Purchase this Solution
Solution Summary
Response guides on the financial analysis of daycare center
Solution Preview
It's close to a $40,000 loser and we ought to devote our efforts elsewhere," noted Kara Whitmore, after reviewing financial reports of her company's attempt to offer a reduced-price daycare service to employees. The daycare's financial figures for the year just ended follow.
Revenues $120,000
Fixed Costs $45,000
Traceable Fixed Costs $89,000
Allocated Corporate ...
Purchase this Solution
Free BrainMass Quizzes
Operations Management
This quiz tests a student's knowledge about Operations Management
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media