28. Triad Children\'s Center, a non-profit organization, uses relevant cost anal

Question

28. Triad Children's Center, a non-profit organization, uses relevant cost analysis to determine whether or not new services are desirable. TCC is looking at adding a new educational program for grade school children who are having difficulty with their reading and math skills. The following relevant costs are expected if the program is accepted: Costs (per year) Program Director Part-time Assistants Variable cost per child 39,000 $28,000 $900 TCC estimates that a maximum of 40 children will participate in this program in the first year. If TCC decides to implement this program, funding will be received from the City Chamber of Commerce ($50,000) and a local Private University Endowment Fund ($35,000) Calculate the expected surplus or deficit from operations given the above information. O $28,000 surplus $10.000 surplus O$17,000 deficit. $18.000 deficit. O Some amount other than those listed here.

Explanation / Answer

Use Funding Variable cost per child $900 City chamber of commerce $50,000 x No of children x 40 Endowment fund $35,000 Total variable cost 36000 add: Program director 39000 Part time assistants 28000 Total cost 103000 Total funding $85,000 Deficit $18,000 Ans Is d

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