# Continuation of E10-18: prepare an operating expenses budget (Learning} Objectives 1, 2) Refer to Great Start Preschool's

## Question:

Continuation of E10-18: prepare an operating expenses budget (Learning}

Objectives 1, 2)

Refer to Great Start Preschool's data in E10-18. Great Start's primary expense is payroll. The state allows a student-to-teacher ratio of no more than eight children to each teacher. Teachers are paid a flat salary each month as follows:

In addition to the salary expense, Great Start must pay federal payroll taxes (FICA taxes) in the amount of $$7.65 \%$$ of salary expense. Great Start leases its facilities from a local church, paying $$\ 2,000$$ per month plus $$10 \%$$ of monthly tuition revenue. Fixed operating expenses (telephone, Internet access, bookkeeping services, and so forth) amount to $$\ 850$$ per month over the nine-month school year. Variable monthly expenses (over the nine-month school year) for art supplies and other miscellaneous supplies are $$\ 12$$ per child.
\section*{Requirements}
1. Prepare Great Start Preschool's monthly operating budget. Round all amounts to the nearest dollar.
2. Using your answer from E10-18 and Requirement 1, create Great Start Preschool's budgeted income statement for the entire nine-month school year. You may group all revenues together and all operating expenses together.
3. Great Start is a not-for-profit preschool. What might Great Start do with their projected income for the year?

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