Each part of this assignment is an individual assignment. All submissions are required to be your own words and calculations. While it is recognized that students may discuss concepts and ideas, each student is required to construct their own response. You are not allowed to share/exchange your written answers or computations with others. Otherwise, you will be  reported for cheating. In the event that the responses prepared by individual students appear to be the same or highly similar the instructor will consider referring the students to the Faculty of Management Academic Misconduct Committee for consideration.

Plagiarism

Integrity in academic work is a central element of learning and is the basis of intellectual pursuits in any academic community. It is also your responsibility to abide by the Student Conduct Code   and Student Academic Code of Conduct.

Academic misconduct will not be tolerated. Academic misconduct includes, but is not limited to, giving  and  receiving  information  during  any  test  or  exam;  using  unauthorized  sources  of information during any test; plagiarizing; fabrication, cheating, and, misrepresenting the work of another person as your own; facilitation of academic misconduct; and under certain conditions, non-attendance.

Plagiarism,  intentional  or  not,  will  not  be  tolerated.  You  must  reference  your  work  and acknowledge sources with in-text citations and a complete list of references. This includes direct and indirect quotes, diagrams, charts, figures, pictures and written material.

For group projects, responsibility for academic integrity, which can result in academic misconduct and its resulting penalties, rests with each person in the group and sanctions would be borne by each member. More details on Academic Misconduct are set out in the Student Conduct Code and Student Academic Code of Conduct Policies in the current Vancouver Island University calendar. The complete policies are located online at:http://www.viu.ca/policies/policies-index.asp

Generative AI (Including ChatGPT) Not Permitted

The use of generative artificial intelligence tools or apps for assignments in this course, including tools like ChatGPT and other AI writing or coding assistants, is prohibited. Any work submitted must be your own original work. Any use of generative artificial intelligence (AI), including

ChatGPT, is prohibited and constitutes academic misconduct. Any student suspected of submitting work that includes AI generated content maybe asked for preliminary work or other materials to evidence the student’s original and unaided authorship. The student may also be asked to separately explain or support their work. AI identification methods may also be employed by the instructor. After review, if it is determined by the instructor that submitted work likely contains AIgenerated content, the work may receive a zero and maybe subject to further misconduct measures set out in the Academic Integrity Policy (96.01) and Procedure

(96.01.001).

Referencing

Faculty  of  Management  (Business)  requires  the  APA  style  of  referencing   for  academic papers. Resources for using APA are available from the VIU Writing Centre (Library, Room 474). You can find their hours of operation and access to online student resources (including tutorials and a printable Quick Guide) at: Writing Centre | Vancouver Island University | Canada (viu.ca) https://services.viu.ca/writing-centre.

Mustafa Day Care Center

No crying babies

YOUR ROLE

While you believe that you are a student currently taking Accounting 362, for this assignment

you are in fact anew employee of the Chartered Professional Accountant firm Collins and

Homes (CH). The Mustafa Day Care Center, Inc (MDCC) hired CH as external consultants to

help them improve their current operations and to achieve their strategic objectives consistent

with their mission. CH specializes in providing accounting and consulting advice and analysis

for businesses.  You, as an employee of CH, are expected to write memos, conduct research,

perform. quantitative and qualitative analysis as well as provide clear recommendations. At all

times, work submitted must be professional both in terms of content as well as presentation. This is not high school or university but rather the real world. Do the work as if your job depends on   it, because it does!!

MUSTAFA DAY CARE CENTER (MDCC)

The Mustafa Day Care Center, Inc. (MDCC) began operations in a vacant warehouse retrofitted

with bathrooms and kitchen facilities. MDCC’s mission is to provide quality, affordable

childcare to the residents of the community and surrounding area. The service area is a rural,

economically depressed town that continually ranks in the lowest 10 percent of per-capita

income in the country. The organization’s seven-member board of directors is comprised of

volunteer representatives from various agencies throughout the community–the school district, community college, hospital, Services BC, etc. The board members bring a breadth of human

services experience to the oversight of the day care, but most do not possess an accounting or

financial background. While they were committed to the financial viability of the day care, they initially focused on the center’s mission–to provide affordable childcare to working-class

families. As a result, the board set childcare rates to achieve their goal of affordability rather than assuring adequate revenues to provide high-quality services while reaching breakeven points.

From its founding,the center faced another significant challenge. The center was the first of its kind in the community, so negative perceptions about using “institutionally” provided day care were prevalent. Local families preferred to use in-home childcare provided by friends or relatives. These perceptions and preferences, coupled with poor administrative practices, caused the center to struggle continually to meet its financial obligations. MDCC was almost forced to   close its doors on more than one occasion. The financial performance of MDCC is not unusual,  as many community-based day care facilities struggle to remain open.

DAY CARE INDUSTRY REVENUE AND COST PATTERNS

As an industry, day care facilities generally operate with very low profit margins. Typical for-

profit day care profit margins are approximately 4 percent, with about 70 percent of a center’s

total costs attributed to wages and other employee-related costs. In British Columbia there is a

legislation to protect and promote the health, safety, and well-being of vulnerable children, youth

and adults receiving care in licensed care facilities.  This legislation is the Community Care and Assisted Living Act, Child Care Licensing Regulation and Residential Care Regulation.  The

licensing regulations drive a significant level of employee-related costs. These regulations

mandate a strict staff-to-child ratio that all licensed facilities must follow. For example, infant  care (ages two weeks to two years) regulations require at least one staff member for every four children (see excerpt from regulations in Exhibit 1). Thus, if a center pays just the minimum

wage (currently $12.65 per hour, $15 per hour with taxes and benefits), at least $3.75 per hour would need to be charged for each infant just to cover the cost of the employee. Additionally,  one must consider how revenues are affected when there are fewer than four infants per employee scheduled in the nursery. When the ratio drops, income per hour drops; however, the  full hourly wage to the employee remains the same and an immediate loss occurs. See Exhibit 1 for the complete staff ratio requirements.

In addition to labour, other costs that impact day care center operations include occupancy costs, food, insurance, supplies, and programming expenses. Occupancy and food costs are also highly influenced by the Community Care and Assisted Living Act, as a facility must provide a minimum amount of space per child (based on age) and follow specific nutritional guidelines in preparing meals and snacks.

MDCC PLANNING AND OPERATIONS

About five years into operations, a new board of directors was appointed, and strategic objectives were developed. As its first strategic actions, the board replaced the Center’s administration and   developed specific operating procedures to keep the facility afloat financially. To eliminate the community’s negative perceptions of institutionalized childcare, the board decided to move the center to a higher-quality facility. After further study, the board concluded that constructing a new facility would be the best option for providing quality childcare in an attractive and safe environment. In addition, the new building would house the First Nation’s Aboriginal Head Start program and the local school district’s handicapped pre-school program, as these programs were housed in inadequate facilities. Thus, the MDCC board spearheaded the construction of an 8,000-square-foot building that would be owned by MDCC, Inc., and funded in part by a   government loan to support B.C.’s rural development.

During the planning and construction of the new facility but prior to its opening, the MDCC board had to resolve a few issues. First and foremost, the board did not want to raise the

childcare rates, for fear that doing so would deter people from patronizing the facility. On the

other hand, the board was not at all positive that the existing rates would cover the costs

associated with the new building. In addition, MDCC was becoming a landlord, and this created   additional concerns for the board. MDCC agreed to lease floor space or rooms to the First Nation and school district, perform. facility maintenance, and provide utilities. MDCC did not provide

any furniture or fixtures. The board’smain question: How much rent should MDCC charge the

tenants? The MDCC board researched the lease rates charged to the area’s commercial retail

facilities and determined that $20 per 100 square feet was the going rate and decided to charge

their tenants at this rate. Because the board members were not experienced in making financial

and capital expenditure decisions, they did not fully consider that this rate was for floor space

only; commercial leaseholders typically pay all of their own utilities, sanitation, and maintenance fees. Thus, the board had inadvertently created the potential for a future financial crisis for

MDCC. Selected post-construction revenues, costs, and operational information for MDCC follow.

MDCC COST STRUCTURE

LABOUR COSTS

MDCC maintains a staff of employees assigned to each age-level classroom that is in compliance with regulations. The staff schedule is rotated throughout the week so that the staff-to-child ratio

is always maintained while no one employee works more than 40 hours per week. The employer’s labour costs include payroll taxes and benefits arepresented in Exhibit 2.

FOOD COSTS

The center provides food for MDCC patrons, but it does not charge a separate fee to recover the cost of snacks or meals. The cost of food is included as part of the tuition fee. In addition, the employees are required to remain on-site during the lunch hour in order to maintain the staff-to- child ratio, so their meals are also provided by the center. All children and classroom staff receive breakfast, lunch, and two snacks a day.

OCCUPANCY COSTS

Building: Because MDCC worked in conjunction with the local school district and the

Aboriginal Head Start program prior to constructing the new facility, the building was purposely built larger than the space required by the day care only. Consequently, when it came time to

analyze costs, it was the board’s opinion that the Aboriginal Head Start and school district programs should share in the costs of the building.

Utilities: When MDCC designed the facility, it considered the needs of the tenants and designed their rooms accordingly. The board did not have the foresight, however, to setup the tenants’ rooms with their own gas, electric, and water meters. Therefore, all of the utilities are measured through common meters, and MDCC pays the bills for the entire facility. The only exception to this is the telephone expense, as each program contracts and pays for its own phone service. See Exhibit 4 for details.

Maintenance, etc.: As specified in the lease agreement, MDCC pays the entire building’s expenses related to maintenance, cleaning supplies, and sanitation. See Exhibit 4 for details.

INSURANCE COSTS

MDCC has four different insurance costs: property, general liability, officer’s bond, and

worker’s compensation. The property insurance covers the entire building. The general liability insurance covers the children and staff in the MDCC program and helps protect the center

against accidents or claims against the staff. The tenants must carry their own liability insurance. The bond insurance on the officers covers the center for any inappropriate handling of financial   matters by the board of directors. Finally, the worker’s compensation insurance covers the administration and MDCC employees for work-related injuries.

OTHER OPERATING COSTS

A complete listing of the organization’s operating expenses is shown in Exhibit 2. The costs not previously discussed include administrative or program costs such as accounting, advertising, continuing education, and supplies. These costs are attributable solely to MDCC.

THE ACCOUNTANT’S CHALLENGE

Rather than addressing the revenue and cost issues that arose during the facility construction, the board took a “wait and see” position and opted to review both the childcare rates and rental rates after the new facility had begun operations. After the first year of building occupancy, the MDCC board wanted to evaluate the costs and revenues associated with each of the day care’s and tenants’ programs. The board hired CH to explain why the center is running at a loss. You indicate that you believe that both the childcare rates and rental rates were set without establishing correlation to the costs that they were intended to cover. You also state that you want to take the time to complete a thorough cost and profitability analysis of the day care’s childcare programs and tenant agreements. In order to do so, you decide to implement an activity-based costing system to allocate costs to the various programs and tenants.

Exhibits 2 and 3 provide revenue and expense information for the first year of operations at the

new facility. Exhibits 5-7 provide additional information useful for the cost analysis and decision making.

ACTIVITY-BASED COSTING—A QUICK REVIEW

Activity-based costing (ABC) is used frequently in manufacturing settings because it typically improves product cost information. ABC replaces arbitrary cost allocations by first assigning   costs to activities and then to goods based on how much each good uses the activities. The concepts of ABC can also be applied to service-based organizations where tangible products do not exist. In a service organization, costs are assigned to the various activities performed, cost drivers that measure the activities performed are identified, cost driver rates are calculated for each activity, and the resulting rates are used to assign activity costs to the types of services provided. This process reflects the causal relationship between the activity, the costs created by the activity, and the assignment of these costs to services.

IDENTIFICATION OF COST DRIVERS

There are many activities present in a day care setting that create or drive costs. An example is

the preparing and serving of food. It is relatively easy to assign many of the costs, such as food

and direct labour, to this activity. It is more difficult, however, to assign costs to many of the

most significant activities that occur regularly in a day care. These activities (like reading a book, playing a game, or teaching a skill) are key components of the service being provided—

childcare— but they are difficult to measure. Therefore, identifying each of the individual

activities that drive cost and then assigning cost to the daycare programs based on those activities

maybe cost prohibitive. For that reason, MDCC places activities into broad category

classifications. When considering drivers that would be cost effective yet causally related to the   costs being incurred, population or a population subset becomes the driver identified for many of the activity cost pools. Population maybe measured in terms of enrollment, class size, or number of staff. See Exhibit 7.

Mustafa Day Care Center

Required in hard copy during the class scheduled time no later than Monday, March 4th, 2024. Prepare a memo to the board of directors of MDCC to address the following issues/questions:

1.   Identify the services or programs to be included in the cost and profitability analysis. (2 Marks)

2.   Examine the costs listed in Exhibit 2.

a.   Identify the direct costs associated with each service or program.  (2 Marks)

b.  Which costs would be organization-sustaining costs? Provide an argument for or against assigning these costs to services or programs. (2 Marks)

3.   Identify the broad activity categories and create cost pools by assigning the costs from Exhibit 2 to the pools. (4 Marks)

4.   Identify the cost drivers that have a causal relationship to the activity cost pools created in Issue/Question 3. (4 Marks)

5.   Calculate the activity or cost-driver rates for each cost pool. Note: You should develop rates that will allocate costs to MDCC programs and/or tenants only. You should not

allocate any costs back to general administration. (4 Marks)

6.   Using the services or programs identified in Issue/Question 1, determine service or

program revenues, assign the costs to the service or programs, and calculate service or program profitability. (6 Marks)

7.   Based upon your calculations in Issues/Question 6, which services or programs are

operating successfully? What appears to be the determining factor in whether the service or program is profitable? (6 Marks)

8.   Discuss at least four alternatives for improving the overall profitability of the daycare facility. (8 Marks)

9.   Discuss and complete a detailed balance scorecard for MDCC (See Exhibit 8). Identify at least four objectives for each perspective. For each objective identify appropriate measures and targets consistent with MDCC’s mission. Provide a strategy map to visually present the causal relationships among the objectives of the balance scorecard.

(12 Marks)

【返回顶部】【打印本稿】 【关闭本页】

相关文章

【上一篇】：代写MGTS7610 - Management Communication Semester 1, 2024调试R语言程序

【下一篇】：代写MGTS7610 - Management Communication Semester 1, 2024调试R语言程序

版权所有：编程辅导网 2021 All Rights Reserved 联系方式：QQ:99515681 微信：codinghelp 电子信箱：99515681@qq.com
免责声明：本站部分内容从网络整理而来，只供参考！如有版权问题可联系本站删除。 站长地图

微信客服：codinghelp