Elder Services

In: Business and Management

Submitted By boopiggy
Words 627
Pages 3
Background Elder Services is a not-for-profit organisation that has three departments housed in one location, in addition to the headquarters housed in an adjoining building. The organisation provides services for elderly clients who are still living at home. One department provides meals, one department provides cleaning services, and one department provides health care services. Elder Services relies on client fees and a small grant from the Federal Government to provide services. Following are the results from last year’s operations. Table 1 – Departmental Income Statement for year ended 30th June 2010 Departments Meals Cleaning Health Total Visits 10 000 10 000 10 000 30 000 $50 000 $100 000 $150 000 $300 000 Revenues Variable cost 30 000 50 000 120 000 200 000 (labour &supplies) Variable 5 000 2 000 5 000# 12 000 transportation Fixed 5 000 10 000 15 000 Transportation* Fixed costs (other)% 4 000 8 000 12 000 24 000 Allocated HQ cost 10 000 20 000 30 000 60 000 $54 000 $90 000 $167 000 $311 000 Total expenses ($4 000) $10 000 ($17 000) ($11 000) Surplus/(Deficit) #Nurses use their cars. *Fixed costs transportation are allocated based on the number of vehicles %Fixed costs (other) are allocated based on revenue. Note: Variable costs are direct costs for each department. In the past, the Federal Government also provided small grants each year to cover any losses for Elder Services. However, due to an economic downturn and decreased tax funds in the current year, the government will not be able to provide this extra support next year. In light of these changes, the managers of Elder Services are trying to decide how to balance the budget.

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Consulting Brief
Your consulting firm, HBC110 Consulting, has been employed by Elder Services to assist with a financial analysis of its operations. The objective of the anlaysis is to provide guidance to management on…...

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