Assignment 1: Cost, Volume, Profit Analysis - AU ACC202
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M3_A2_Discussion.docxRunning head: COSTS 1
COSTS 2
Cost Drive for Daycare Center
Student’s name
Instructor’s name
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Little Angels Daycare Center Costs
The daycare center will need some materials and labor in order to provide the required care services. The facility will hold children of ages 3 months to 5 years. Some materials required include educational supplies like toys and books that will cost roughly $1,500 ($1,000 toys and 500 books), indoor equipment like cribs and CD player will cost approximately $2,350, outdoor equipment like playground equipment such as slides and swings will cost approximately $2,150, office furniture will cost roughly $1,450 (five office chairs and two office tables), kitchen supplies will cost roughly $1,000 that include water storage tanks, and housekeeping equipment will cost roughly $400. This will total to $8,850.
The small facility is expected to hold a maximum of 20 children per month. It will offer baby-sitting services as well as learning services with a well planned curriculum. Two teachers will take care of baby-sitting services and one teacher for learning services. The average pay will $17,850 per year. Overhead costs include non-labor indirect expenses such as utilities and rent.
