73960423 Appaloosa County Day Care Cent
Case Study: Appaloosa County Day Care Center, Inc.
Florida Memorial University
Bus 501 Accounting for Management
Fall 2011
Dr. Rosalie C. Hallbauer
Aldon Hemmans
Mary Saddler
Gerald Turner
Identify the services or program to be included in the cost and profitability analysis.
The Department of Human Services licensing regulations of a staff to child ratio that all licensed facilities must follow. If a center pays just the minimum wage at least $1.95 per hour would need to be charged for each infant just cover the cost of the employee. In addition, other costs that impact day care center operations include occupancy costs, food, insurance, supplies and programming expenses. Occupancy and food costs are influenced by the Department of Human Services. The facility must follow specific nutritional guidelines in preparing meals and snacks. The board concluded that constructing a new facility would be the best option for providing quality childcare in an attractive and safe environment. The ACDC board spearheaded the construction of an 8,000 square foot building that would be owned by ACDC and funded in part by a federal grant and a loan from the local USDA Rural Development Office. The cost of food is included as part of the tuition fee. Also when it came time to analyze costs, it was the board’s opinion that the Head Start and school district programs should share in the costs of the loan and building. ACDC pays the bills for the entire facility. The only exception to this is the telephone expense, as each program contracts and pays for its own phone service. ACDC has four different insurance costs: property, general liability, officer’s bond and worker’s compensation. The costs not previously discussed include administrative or program costs such as accounting, advertising, continuing education and supplies. These costs are attributable solely to ACDC. Activity based costing is used frequently in manufacturing settings because it
Florida Memorial University
Bus 501 Accounting for Management
Fall 2011
Dr. Rosalie C. Hallbauer
Aldon Hemmans
Mary Saddler
Gerald Turner
Identify the services or program to be included in the cost and profitability analysis.
The Department of Human Services licensing regulations of a staff to child ratio that all licensed facilities must follow. If a center pays just the minimum wage at least $1.95 per hour would need to be charged for each infant just cover the cost of the employee. In addition, other costs that impact day care center operations include occupancy costs, food, insurance, supplies and programming expenses. Occupancy and food costs are influenced by the Department of Human Services. The facility must follow specific nutritional guidelines in preparing meals and snacks. The board concluded that constructing a new facility would be the best option for providing quality childcare in an attractive and safe environment. The ACDC board spearheaded the construction of an 8,000 square foot building that would be owned by ACDC and funded in part by a federal grant and a loan from the local USDA Rural Development Office. The cost of food is included as part of the tuition fee. Also when it came time to analyze costs, it was the board’s opinion that the Head Start and school district programs should share in the costs of the loan and building. ACDC pays the bills for the entire facility. The only exception to this is the telephone expense, as each program contracts and pays for its own phone service. ACDC has four different insurance costs: property, general liability, officer’s bond and worker’s compensation. The costs not previously discussed include administrative or program costs such as accounting, advertising, continuing education and supplies. These costs are attributable solely to ACDC. Activity based costing is used frequently in manufacturing settings because it