HSM/260 Financial Management for Human Service Managers week 4

IndividualFixed Costs, Variable Costs, and Break-Even PointResource:Ch. 10 inFinancial ManagementCompleteExercises 10.1 & 10.2 on pp. 146–47.Postyour final answers as a Microsoft®Word attachmentExercise 10.1During the sixth month of the fiscal year, the program director of the WestchesterHome-Delivered Meals (WHDM) program decides to again recompute fixed costs,variable costs, and the BEP using the high–low method. Here are the number ofmeals served and the total costs of the program for each of the first six months:Month Meals Served Total CostsJuly 3,500 $20,500August 4,000 22,600September 4,200 23,350October 4,600 24,500November 4,700 25,000December 4,900 26,000Recompute fixed costs, variable costs, and the BEP. What are the variablecosts? What are the fixed costs? How many meals will the WHDM program needto provide during the fiscal year to reach the BEP? How much profit will the programearn if it completes its 45,000-meal contract with the City of Westchester?Exercise 10.2It has been two years since the New River Community Council (NRCC) started itsnewsletter dealing with state and community funding opportunities for human serviceagencies. The current number of subscribers to the newsletter is 525. During thesecond year, the NRCC hired a new part-time newsletter coordinator (social workstudent). The NRCC has raised the salary of the part-time newsletter coordinator to$6,000 per year and has also hired another part-time student as an assistant for tenhours a week. The assistant is to be paid $75 per week or $3,900 per year. Togetherthe newsletter coordinator and the part-time assistant believe they can handle up to650 newsletter subscribers. Beyond this number, the newsletter program willrequire still more staff resources. In order to help cover the cost of the new part-timeassistant, the executive director has also decided to increase the annual subscriptionprice of the newsletter to $20. Additionally, the variable costs of preparing, printing,and mailing six bimonthly issues of the newsletter have risen to $4.50.Recompute the BEP for the newsletter program. What is the new BEP? Is thenew BEP a feasible solution? Why or why not? Will any slack capacity exist? If so,how much? If not, why not?