Reference no: EM132710167
Dan Schaefer, executive director of the Petersburg, Va., office of the Volunteers of America (VOA), is eager for the board of directors to approve his plan to open a day-care center in the Alta Vista housing community. Mr. Schaefer believes this proposal is an ideal way to begin to rebuild Alta Vista. The Petersburg VOA helped to establish this community in 1971; unfortunately, the residents have seen a rise in criminal activity and a decrease in their quality of life.
Although the board approves Mr. Schaefer's proposal at the end of the case, assume instead that he has hired you to analyze the proposal in preparation for the board meeting. Specifically, Mr. Schaefer wants you to do the following:
Question 1: Prepare cost-volume-profit (CVP) analysis of the proposal's financial implications. Specifically, pprepare analysis that includes the projected revenue, variable costs, and fixed costs for enrollment levels of 20, 25, 30 and 37 students using the monthly projections in
Question 2: What is the break-even number of students needed to enroll without the administrative fee to the VOA office?