Responsibility centre performance reports Data Jim Smith has recently been appointed as the Head Teacher of Mayfield School in Midshire. The age of the pupils ranges from 11 years to 18 years. For many years, Midshire County Council was respon- sible for preparing and reporting on the school budget. From June, however, these responsibilities passed to the Head Teacher of Mayfield School. You have recently accepted a part-time appoint- ment as the accountant to Mayfield School, although your previous accounting experience has been gained in commercial organisations. Jim Smith is hoping that you will be able to apply that experience to improving the financial reporting procedures at Mayfield School. The last budget statement prepared by Midshire County Council is reproduced below. It covers the ten months to the end of May and all figures refer to cash payments made.

Jim also provides you with the following informa- tion relating to existing pupils: pupils move up one school-year at the end of July; for those pupils entering year 6, there is an option to leave the school. As a result only 80% of the current school-year 5 pupils go on to enter school-year 6; of those currently in school-year 6 only 95% continue into school-year 7; pupils currently in school-year 7 leave to go on to higher education or employment; the annual income per pupil is 1200 in years 1 to 5 and 1500 in years 6 to 7. The new year 1 pupils come from the final year at four junior schools. Not all pupils, however, elect to go to Mayfield School. Jim has investigated this matter and derived accurate estimates of the proportion of final year pupils at each of the four junior schools who go on to attend Mayfield School.

The number of pupils in the final year at each of the four junior schools is given below along with Jim's estimate of the proportion likely to choose Mayfield School.

Task 2

(a) Forecast the number of pupils and the income of Mayfield School for the next year from August to July

(b) Assuming expenditure next year is 5% more than the current annual budgeted expenditure, calculate the budgeted surplus or deficit of Mayfield School for next year.

Midshire County Council Mayfield School Statement of school expenditure against budget: 10 months ending May Budget Under/ Expenditure over Total budget to date date spend for year Teachers full-time 1 680 250 1 682 500 2250 Cr 2019 000 Teachers part-time 35 238 34 600 638 41 520 Other employee expenses 5792 15 000 9 208 Cr 18 000 Administrative staff 69 137 68 450 687 82 140 Caretaker and cleaning 49 267 57 205 7938 Cr 68 646 Resources (books, etc.) 120 673 100 000 20 673 120 000 Repairs and maintenance 458 0 458 0 Lighting and heating Rates Fixed assets: 59 720 23826 66 720 7000 Cr 80 064 19 855 3.971 23 826 84 721 100 000 15 279 Cr 120 000 furniture and equipment Stationery, postage 1945 0 1945 and phone Miscellaneous expenses 9 450 6750 2.700 8 100 Total 2140477 2151 080 10 603 Cr 2 581 296