Big City ISD Child Center operates from Monday to Friday. The Center is a joint

Question

Big City ISD Child Center operates from Monday to Friday. The Center is a joint effort between the school district and the city and provides provides childcare and educational services for innercity kids between the ages of three months and five years. It has fixed expenses of $36,000 per week and charges parents $10 per day for each child that attends the program. A city contract pays the center $30,000 per week. It costs the center $3 per day for supplies and snacks for each child. The Center also offers an optional earlyreading program for children over the age of three. Parents pay an additional $3 per day to enroll a child in the reading program. It costs the center an additional $5 per day for each child in the program. Thirty percent of the children attending the center are enrolled in the reading program. How many whole children have to come to the Center each week for it to at least break even?

Explanation / Answer

Contribution per child-With out reading program=Charge per child-supplies and snacks cost per unit=$10-$3=$7

Contribution per child-reading program=Charge per child+Additional charge per child-supplies and snacks cost per unit-Additional cost per child=$10+$3-$3-$5=$5

Contribution per child=Contribution per child-With out reading program*0.7+Contribution per child-reading program*.3

=$7*0.7+$5*0.3=$6.4

Fixed cost=$36,000+$30,000=$66,000

ow many whole children have to come to the Center each week for it to at least break even=Fixed cost/Contribution per child=$66,000/$6.4=10,312.5=10,313 (round)

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