Essay on Squeaky Horn Case

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Abbington Youth Center
Background
1. Abbington Youth Center is a not-for-profit organization, which provides three high-quality programs: Infants and Toddlers Program, Preschool Program, and After-School Program. Targets are children up to three-years old, three to five-years old, and five to seven-years old. 2. Mark Thomas, assistant director of the Abbington Youth Center, instructs the program directors with his breakeven analysis. He calculated the following results by using average method: * Each student contributed $4,348 to fixed costs * 115 students are the breakeven point 3. The current Abbington’s programs enrollment is exactly at breakeven, so Mr. Thomas encourages the program directors to expand the size of …show more content…
The formula will be shown in the following table.

Table 2: Revised Breakeven Analysis | Infants and Toddlers | Preschool | After-School | Aggregate | Student at full capacity | | | | 150 | Expected number of students | 50 | 50 | 40 | 140 | Fee per student | $4,520 | $5,320 | $5,970 | | Total revenue | 226,000 | 266,000 | 238,800 | 730,800 | New Variable cost per student | $498 | $1,079 | $929.6 | | Total variable cost | 24,900 | 53,950 | 37,184 | 116,034 | Contribution to program fixed cost | 201,100 | 212,050 | 201,616 | 614,766 | Less: program fixed costs | 130,000 | 140,000 | 105,000 | 375,000 | Contribution to allocated fixed cost | 71,100 | 72,050 | 96,616 | 239,766 | Less: Allocated fixed costs | 42,675 | 51,210 | 76,815 | 170,700 | Surplus | 28,425 | 20,840 | 19,801 | 69,066 | *New variable cost equals (variable cost*0.75)*1.05+(variable cost*0.25) | Contribution Margin | 4,022 | 4,241 | 5,040.40 | | Total fixed cost | 172,675 | 191,210 | 181,815 | | Breakeven Point | 43 | 45 | 36 | 124 |

Based on suggestions and comments made at the meeting, the adjusted breakeven point for the Centre is 124 students, and the enrollment for each of the three programs has excelled their breakeven point by 3,5, and 4 students respectively.

In addition, the current surplus ($69,066) allows Ms. Fineberg to pay for the much-needed renovation
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