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determine whether to keep or drop the adult education? Mortgage on the building Pre-school supplies Monthly heat and lighting for the building

A firm operates two lines of business pre-school education and weekend adult education classes usi Show more A firm operates two lines of business pre-school education and weekend adult education classes using a common classroom building. The building also has three offices for the firms president/owner accountant and marketing specialist. The day care uses the building Monday-Friday during the day (6:00 am 5:30 pm) while the adult education uses the building in the evenings (5:30 pm 10:30 pm) and all day on Saturday-Sundays. The firm wants to determine whether the adult education pays its own way. That is the firm wants to know whether to keep the adult education or drop it. a. Of the following list of costs and revenues in the table below which items are relevant to calculating the contribution (profit or loss) of adult education and why? b. If there are common costs would you allocate them? If yes how? If no why not? c. What factors should determine whether to keep or drop the adult education? Mortgage on the building Pre-school supplies Monthly heat and lighting for the building Adult education supplies Snow removal/parking lot maintenance Pre-school revenues Pre-school teacher salaries Adult education revenues Adult education teacher salaries Pre-school advertising expenses The firms presidents salary Adult education advertising expenses The firms accountants salary Building maintenance and cleaning The firms marketing specialists salary Show less


 

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