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?

Transcribed Image Text:

Teachers of two-day program: Teachers of three-day program: Teachers of four-day program: Teachers of five-day program: Preschool director's salary: $432 per month $648 per month $864 per month $1,080 per month $1,500 per month