Question 1
From the perspective of the corporation, what kind of responsibility center is Winnbrook ? (no more than five words)
Question 2
Use variance analysis to explain the causes of the increase in revenue from 2007 to 2008. Show your computations neatly, and clearly label the appropriate variances.
Question 3
Using child-weeks as the appropriate measure of volume (e.g., 1 child enrolled for 48 weeks = 48 child weeks), indicate whether each item below is fixed (F), variable (V), or other (O), and explain your reasoning. For variable items, your explanation should show the rate per child-week. Use Mr. Lander's 2007 estimated amounts as the basis for your computations.
Question 4
Use your analysis in Question 3 to set up a flexible budget formula for Winnbrook. Show your computations where necessary.
Question 5
How, if at all, would a flexible budget be of use to Ms. Johnson in the management of Winnbrook? (no more than 100 words)
Question 6
Ms. Johnson's budget for 2007 was based on an average attendance of 45 children per week, and had budgeted food costs totaling $ 8,640 for the year. Mr. Lander's estimate of $ 12,000 was based on an average attendance of 50 children per week. Prepare a variance analysis to explain the increase in food costs between Ms. Johnson's budget and Mr. Lander's estimate.
Question 7
Prepare a brief (no more than 50 words) explanation to Ms. Johnson of why Mr. Lander's estimated food costs for 2007 differ from her budget.
Question 8
As a consultant to the corporation, you have been asked to recommend some non-financial information that Ms. Johnson and the corporation could use to assess Winnbrook's performance. List two items of non-financial information, giving a very brief (no more than 50 words) explanation for each of why you chose it.
Question 9
Ms. Johnson has asked you for a recommendation as to what is the best course of action for her to take in this matter. Your answer should focus on identifying problems that you see in the 2008 budget and recommending a course of action to resolve the problem. (your answer should not exceed this page)