Analysis of budgeting



Analysis of charter school budget budgeting

Q1) Static or flexible budget

The sample budget of charter school is a flexible in nature because of several reasons. Firstly, the budget is created for three different output levels; secondly, cost of each level is allocated on individual bases, and most importantly, school can use this budget for the controlling of cost and expenses (Albercht et al, 2007).

Q2) Total revenue

Management of school is created this budget by assuming that students will be enrolled in three spans (66, 120,100). According to the school budget, total revenue earned by school from one single student is calculated as follows

Total revenue per 120 students = Total revenue/no of students = 727567/120

= $6063

Total revenue per 100 students = Total revenue/No of students

= 606306/100

= 6063

Total revenue per 66 student = Total revenue/No of student

= 400162/66

= 6063.06

Q3) Total expense per student

Based on the information available on school budget the total expense done on a single student, is calculated as follows

Total expense per 120 students = Total expense/No of students

= 542157/120

= $4518

Total expense per 100 students = Total expensee/No of students

= 528267/100

= $5283

Total expense per 66 student = Total expense/No of student

= 504654/66

= $7646

Q4) Expenses done on student is necessary

Charter school is known as providing quality educational services to its students, and for that, it has provided innovative services to its entire student. All the expenses bear by school for providing quality education to students, so that they can become the future leader, are necessary. For instance, expense bear on hiring of new staff is essential because it would help them in increasing the quality of education in the school (Kusik & Vargas, 2009.

Similarly, expense bear on field trip is also necessary, as for student extracurricular activities are vital for increasing their motivation and focus level. In addition to this, expenses bear for providing educational material to students is also essential, as it will provide student excellent opportunity for continuous and improve learning. On the other hand, other expense, like advertising expense is crucial for attracting new students, expenses on equipment is also essential for providing better services, internet expense is essential for providing student the opportunity of gathering information form internet, and others (Moseley, 2005).

Q5)

Breakeven point = Fixed cost/ (profit-variable cost)

Fixed cost for all the level = $458817

Variable cost per unit = $694.5

Revenue per unit = $6063

Contribution margin = 6063-694.5

= $ 5368.5

Breakeven point per student = fixed cost/contribution margin

= 458817/5368.5

Breakeven point = 86 student per semester

Based on the calculation school needs about 85 new students every year, and based on this, school is viable if it is enrolling around 100-120 students every semester.

Q6) Advantages of budget

A budget is prepared by organization to evaluate their performance of the previous year, and to plan for future (Oliver, 2000). Some of the common advantage of preparing a flexible budget, as the management of charter school has formulated are discussed below.

The first advantage of developing such a budget is that it has ...