XYZ Childcare Ltd plans to open a day care centre at the beginning of next year. A building has been leased and the company has estimated that the following annual costs will be required:

Salaries — three qualified staff Salaries — two assistants Lease rental (building) Electricity Sundry expenses (all fixed) Supplies Meals and snacks

$

128000 64000 62400 4800 21600 780 2080

per child per child

Based on available space and qualified staff, management believes that the maximum number of children that can be cared for at the day care centre is 120.

Required

A. Assume that the day care centre can attract 120 children when it opens. Determine the annual fee per child that must be charged to break even financially.

B. If the company charges $5980 per child annually, how many children must be enrolled to break even?

C. Prepare a CVP graph based on a charge of $5980 per child.

D. If management wants to earn an annual profit of $62 400 from the day care centre and can charge $5980 per child, how many children must be enrolled?

E. If the day care centre can attract 120 children, how much must be charged per child to earn a profit of $60000?

F. If the day care centre can attract 120 children, how much must be charged per child to earn a profit of $60 000 plus 15% of annual fees?