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Question - A not-for profit organization has three programs: a soup kitchen, a thrift shop, and a homeless shelter. These three programs share an administrative office and space in the same building. The director of the organization is trying to estimate the total annual cost of running the organization's soup kitchen. The salaries for the soup kitchen's employees total $85,000 per year. The soup kitchen uses $500 in supplies each month and records an annual depreciation expense of $12,000 for its kitchen equipment. The cost of salaries for the administrative office, including the director's salary, is $190,000 per year. The administrative staff uses $300 in supplies each month and records an annual depreciation expense of $8,000 for its office equipment. The administrative office estimates that it spent 2700 staff hours on the soup kitchen, 1500 staff hours on the thrift shop, and 1800 staff hours on the homeless shelter. The entire cost of the administrative office is allocated to the three programs using staff hours as the cost base. The organization's lease payments are $4,000 per month and utilities cost $1,250 per month. Additionally, maintenance costs on the space are equal to $48,000 for the year. The soup kitchen uses 5,700 square feet of the organization's total 15,000 square feet of space. The entire cost of space and maintenance is allocated to the three programs using square footage as the cost base.
Required: Calculate the soup kitchen's total annual cost including:
a) Direct Cost;
b) Indirect Cost (Administrative);
c) Indirect Cost (Space and Maintenance);
d) TOTAL COST.
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