Follow up to last week assignment. please advise

Northville Part II – Modified

When the city council learned how expensive the daycare was going to be, they wanted to look at cost saving options. ; Particularly, they wanted to know how much eliminating infant care would be because Councilman Bob Knight owned a daycare and suggested that toddlers were much less expensive than infants. ; The city council wants to know what the full cost per child will be with administrative expenses allocated to two cost centers: infants and toddlers. ; They also want a recommendation about whether this would be a good cost saving option for the city.

Allocate indirect costs to the infants and toddlers. ; 1/3 of the students are infants and 2/3 are toddlers. ; The state allows for a 4:1 ratio of infants to teachers and an 8:1 ratio for toddlers to teachers. ; Because of the budget pressure, council wants to max this ratio. ; Infants will generally take about half of the space of toddlers and you should assume that the daycare will use all of the space for childcare. ; Capital equipment is allocated based upon the teachers.

Assignment: Use last week’s budget and split out the total cost between the infants and toddlers. ; How much does it cost per child? ; What is your recommendation about eliminating infant care?