The county has an initiative for students in under-performing schools. To get funding, schools provide each student with eight 2- hour- long group tutoring sessions each month. Also, parents must agree to pay $ 10 per month for each child they register for the program. The county will pay each school $ 200 per enrolled child, per month.
Schools must provide one tutor for every five students enrolled in the program, at a cost of $ 50 per hour at a teacher’s home school, or $ 60 per hour if the teacher has to commute from another school in the system.
Schools that participate also need to acquire a site license for a self- study computer program, at a cost of $ 2,400 per year regardless of the number of students. The school also incurs a cost of $ 1.50 per child per tutoring session, for workbooks that are tied to the self-study program.
Generally, the county takes one month to pay bills submitted by schools. Parents pay all tuition bills at the beginning of each month. Participating teachers are paid for all after- school programs at the end of each month. The full cost of the software must be paid by the end of the first month of the program. Workbooks are paid for in the month they are used.
You are the budget manager for Typical County School (TCS). Five teachers in your school have agreed to be tutors. Since you expect to need 15 tutors by the end of the year, you will also use 10 teachers from other schools, as needed. Your calculations indicate an expected 25 students in the pro-gram during the first month it is offered, 41 in the second month and 52 in the third month. As budget manager:
1. Prepare operating budgets for each of the first three months of the program.
2. Summarize the three monthly budgets into a quarterly operating budget.
3. Starting from a zero cash-balance, prepare a cash budget for the first quarter (three months) of the program. You do not have to prepare monthly cash budgets.