Analysis of budgeting



Analysis of charter school budget budgeting

Q1) Static or flexible budget

There are numerous grounds on which the budged of charter school is characterized as flexible in nature, for instance, the charter school budget is developed through three output level i.e. the budget is created on assumptions that students would become part of school on three different spats or occasions(Frowe et al, 2010). Secondly, in accordance with the basic rules of flexible budget, the school administration has allocated cost separately for each level and most importantly, this budget can be utilized for improving the overall financial performance of the school.

Q2) Total revenue

As provided in the case, the management of Charter school has devised this flexible budget analyzing the fact the students would be enrolled in three spats (66, 120,100). On the other hand, school can easily identify the value of revenue earned from one student through this flexible budget.

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

Total expense per student of three categories can be calculated using the below formula.

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

= 542157/120

= $4518

Total expense per 100 students = Total expense/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

Since its incorporation, Charter school is known for providing exceptional and priceless educational and enlightening services to its students as the school believe that proper education is the only platform through which student can become successful and strive hard to accomplish their future goals (Glendinning et al, 2008). In order to accomplish its goals, the management of the school has made it certain to endow student with latest, modern, inventive, and essential equipments needed to acquire modern education. In view of this, expenses bear by school on student for providing quality education to these people, shaping up their future, developing their skills, developing feeling of honesty and patriotism and encouraging them to play a vital role in the development and growth of their country.

In addition to providing quality academic education the management of the school has also bear expenses for the enhancement of student self-esteem by arranging various types of extracurricular programs like, sports, art function, concert, debate, and others(Marginson & Ogden, 2005). Thus, in view of the market position and increasing importance of both academic and extracurricular education it could be concluded that expenses bear by charter school was essential.

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 ...