Reference no: EM132903962

Problem - You are planning to open a small shelter for homeless men in the basement of your church. The governing board has promised you the funds needed to start up the shelter if you can negotiate a reimbursement rate from the city that covers your operating expenses. You expect that you will be able to house 9 men each night, and the city assures you that there will be no shortage of homeless men at any time during the year. You will have to pay one full-time staff person $42,500 a year, and hire a second part-time staffer for $15,500 a year. You will have laundry and food costs of $35 per man per week, and the church will have to pay an additional $3,500 a year in insurance to cover the activities of the shelter. The City will pay you $205 per homeless man per week. (Remember that 9 a night, means that only 9 will be there for a week.)

Develop an annual operating budget using accrual accounting for the shelter in order to show its expected profit or loss. [NOTE: Assume that there are 52 weeks in a year] Attach an Excel Spreadsheet showing your analysis.