Building a Programmatic Budget
BU Accounting Acsh-Budget Discussion
Part 2 – Building a Programmatic Budget –
You’ve been asked by the Executive Director of the Alphabet City Settlement House (ACSH) to prepare an annual budget, to send to a potential foundation funder, for a new Preschool Learning Program (PLP) for neighborhood children. The foundation has a general policy of paying an overhead rate of 10% of total costs, which is intended to cover administrative costs incurred by the grantee organization. You will need to factor that overhead figure into the budget you provide. The foundation also has a policy requiring grantees to match the amount the foundation funds, by raising an equal amount from other new gifts or grants specifically for the program. No such gifts or grants have been raised yet. The PLP is being given the free use of space (two rooms), including utilities, by ACSH. Each room has an occupancy limit of 35 people (Teacher, two Teaching Assistants, and 32 children) and would otherwise cost $16,000 annually to rent, including utilities. (This would not count toward the match.) The other costs are as follows: Personnel Service Costs: 5% of the Executive Director’s time @ $160,000, 10% of a Program Coordinator’s time @ $80,000; 100% of two new Teachers @ $60,000 each; 100% of four new Teaching Assistants @ $30,000 each. State licensing requirements mandate a second Teaching Assistant when the number of children in a class exceeds 20. The fringe benefit rate is 25%. Other-than-Personnel Service Costs: Books and other supplies, $600 per child. New audiovisual equipment, $7,500 per classroom (assume these items are below ACSH’s capitalization threshold). In-kind use of space/ utilities – see above. In the program’s first year, ACSH expects to have 55 children in the program. How much money should ACSH request from the foundation, including the overhead amount, and how much would ACSH also have to raise to meet the matching requirement, to allow the program to break even? Prepare a line-item budget to support the request. Please round to the nearest dollar (if necessary). Part 3 – Deciding on the Level of Activity of a Program – 4 points ACSH was unsuccessful in obtaining the foundation grant that they tried to solicit in Part 2, but it was able to raise a $150,000 gift for the new program from a generous donor. Wanting to take advantage of that and get the program going, the Executive Director was able to convince the Board to make enough funding available out of the Organization’s unrestricted reserves to fund the incremental costs associated with the program, to allow it to get underway with a target of 30 children during the first year. The Executive Director wants to know the answer to three questions: (1) If we ignore the overhead component of costs, as well as the allocation of existing staff, how much money must ACSH make available to the program out of reserves to allow it to break even using the complement of new staff and classrooms/ related costs that was contained in the program budget sent to the foundation?
(2) Otherwise using the same assumptions as in (1), if ACSH wanted to adjust the costs (number of new staff and classrooms/ related costs) to the minimum needed to teach the 30 children, how much would ACSH have to make available to the program out of reserves to allow it to break even?
(3) Otherwise using the same assumptions as in (2), if ACSH chose to charge the parent(s) of each child a fee instead of making reserves available, how much would ACSH have to charge per child to allow the program to break even? Would the contribution margin be positive or negative?
Please explain your answers, with appropriate calculations where necessary. Please round to the nearest dollar (if necessary).
Collepals.com Plagiarism Free Papers
Are you looking for custom essay writing service or even dissertation writing services? Just request for our write my paper service, and we'll match you with the best essay writer in your subject! With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.
Get ZERO PLAGIARISM, HUMAN WRITTEN ESSAYS
Why Hire Collepals.com writers to do your paper?
Quality- We are experienced and have access to ample research materials.
We write plagiarism Free Content
Confidential- We never share or sell your personal information to third parties.
Support-Chat with us today! We are always waiting to answer all your questions.
