Harbor City Community Center
1) In and FPO context, full-cost accounting can be used to define cost objects. However, since NPOs are not outputting products, full-cost accounting is used to serve a different purpose of cost allocation. Full-cost accounting allows an NPO to be broken down into cost centers, which Young suggests be thought of as “buckets” during the Stage 1 analysis. The two categories of centers are mission centers and cost centers. The mission centers deal with the NPO’s main purpose, generally charging for a service, which is why it can be called a “revenue center”. The other type of center is a service center, which serves the purpose of accumulating the costs of activities to support the mission center. Three methods of …show more content…
The 10% increase in cost for each department (Homemaker Service through Referral and Placement), excluding the other expenses below, would be
940,000 x 1.10 = $1,034,000
The additional other expenses total $508,000, making a total cost of $1,542,000.
Additional T&E expenses are calculated by taking the 4,000 T&E Usage multiplied by a 10% growth by department, making 4,400.
4,400 x $16(hourly rate) = $70,400
Total Cost Per Visit = 1,542,000 + 70,400 = $1,612,400
The 10% increase in client growth would be:
32,900 x 1.10 = 36,190 client visits
Average Cost Per Visit = Total Cost Per Visit/Number of Client Visits = 1,612,400/36,190 = $44.55
I would like to start off by saying that I was not sure how she planned on calculating rent, how she planned on incorporating the T&E costs, which she even said was confusing. This new calculation, though, can help Ms. Conaway in