Use (in Excel) the high-low method to determine the variable cost rate/FTE student, and the total fixed costs based on the quarterly expense budget for 2016-17 (Exhibit 1). Be sure to recognize the time period covered by your estimates (i.e., variable cost/FTE/ for what period? And total fixed costs for what period?)

• Exhibit 1
  Sunshine Day Care Center
  Budget, 2016-17
  	Budget	Budget	Budget	Budget	Budget
  	Q1	Q2	Q3	Q4	Year
  Average FTEs	31	39	46	45	40.25
  Revenue	77,500	98,397	116,058	113,535	405,490
  Expenses:
  Advertising/Promotion	375	375	375	375	1,500
  Appliances	0	0	0	500	500
  Bad Debt	79	101	119	126	425
  Head-Quarters Assessments	16,425	16,425	16,425	16,425	65,700
  Depreciation	534	534	534	534	2,136
  Food & Catering	1,098	1,405	1,664	1,772	5,939
  License & Permits	0	650	100	0	750
  Insurance	1,140	1,140	1,140	1,140	4,560
  Maintenance & Repairs	3,750	3,750	3,750	3,750	15,000
  Office Supplies	300	300	300	300	1,200
  Personnel	31,433	45,072	46,245	55,405	178,155
  Property Tax	2,745	2,745	2,745	2,745	10,980
  Rent	14,664	14,664	14,664	14,664	58,656
  School Supplies	600	600	600	600	2,400
  Taxes	1,650	1,650	1,650	1,650	6,600
  Telephone	1,275	1,275	1,275	1,275	5,100
  Training	0	300	200	0	500
  Utilities	3,000	3,000	3,000	3,000	12,000
  Total Expenses	79,068	93,986	94,786	104,261	372,101
  Net Income (Loss)	(1,568)	4,411	21,272	9,274	33,389
  Cost/FTE	2550.581	2409.897	2060.565	2316.911	9244.745