CASE 9A MIDDLEHURST HOUSE REVIEW PAPER CASE 9A MIDDLEHURST HOUSE REVIEW PAPER Middlehurst House is a daycare center/preschool which operates as a partnership of George Friedman and Bill Compton. The center is in a city that has a large base of twoincome families who have a need for quality day care. The two men started the center this year. Compton contributed $40,000 to get the business started?to purchase equipment and to operate through the early months. Friedman, who previously managed another center, is the director of the center and draws $2,000 per month for his services. Partnership profits and losses, after Friedmans salary, are split 75 percent for Compton and 25 percent for Friedman. ORDER INSTRUCTIONS-COMPLIANT NURSING PAPERS Middlehurst House operates from 6 a.m. to 6 p.m., Monday through Friday. It is in a single building that has a capacity limit of 120 children and meets city and state regulations. At present, the center has six classes, all at maximum sizes, structured as follows: Number of classes Children per class Total children Monthly tuition per child Class sizes are determined by state law which sets a limit on the number of children per instructor. The center uses one instructor per classroom. Tuition is charged monthly. Minor adjustments are made on an individual basis. In October, the most recent month with data available, revenues were $21,500 ($22,600 less $1,100 adjustments). Monthly revenues should be rather stable since classes are full most of the time. Expenses for October were: Salaries for instructors $9,600 Salary of director 2,000 Salary of part-time cook 900 Food expenses 2,200 Staff benefits expenses 2,450 Supplies expenses 600 Occupancy and other administrative expenses 3,250 Total expenses $21,000 Fixed expenses are the salary of the part-time cook and occupancy and other administrative expenses. The salary of the director is fixed?as a partnership, this is in reality a distribution of profits, but it is included in expenses for comparative purposes. Food is $1.25 per student per day. Staff benefits are 10 percent of salaries plus $200 per person for benefit programs for instructors and the part-time cook. Variable supplies are $1 per student per month. Step costs are salaries for instructors, averaging $1,600 per instructor per class. Friedman wants to increase the quality of service by decreasing class sizes and also by expanding student enrollments. These alternatives are interrelated. Friedman thinks that class sizes are too large and that children are not getting the individual attention they require. Friedman surveyed parents of all 80 students to measure their support for a tuition increase tied to a reduction in class size. For children ages 2 to 5, most parents would support a 25 percent tuition increase, and nearly 50 percent would support a 50 percent increase. Of the 5-to-6 age group parents, nearly three fourths did not want any increase. The remainder said they would support a 25 percent increase but no more. Proper class size is very subjective. However, Friedman feels that he could achieve a child/ instructor ratio of 6 to 1 for the 2-to-3 age group, an 8 to 1 ratio for the 3-to-4 and 4-to-5 age groups, and a 10 to 1 ratio for the 5-to-6 age group. The center has easily maintained the 80-student level, with each class full. Friedman keeps in touch with waiting-list parents to make certain each is still interested. This list provides children when someone leaves the center. The current waiting list is as follows: Age group Number of children Age group Number of children Friedman does not start a new class unless more students are on the waiting list than are required per class. Obviously, enough students are on the 5-to-6 age group waiting list to start a new class. Lately, however, he has wondered if the center could make a profit by starting classes with fewer than the requisite number, taking the chance that new students would appear and could be added immediately. Information from his various inquiries implies that a potential market for quality infant care (0 to 24 months) exists. Friedman doesnt think this expansion would be profitable. However, he has never done an analysis of the situation and has not thought about an appropriate tuition. He believes that the infant/instructor ratio in his center should be no higher than 5 infants to one instructor. The center would have no food costs for the infants. Compton will only agree to Friedmans suggested changes if the center will continue to operate at or above the current profit level. Friedman does not start a new class unless more students are on the waiting list than are required per class. Obviously, enough students are on the 5-to-6 age group waiting list to start a new class. Lately, however, he has wondered if the center could make a profit by starting classes with fewer than the requisite number, taking the chance that new students would appear and could be added immediately. Information from his various inquiries implies that a potential market for quality infant care (0 to 24 months) exists. Friedman doesnt think this expansion would be profitable. However, he has never done an analysis of the situation and has not thought about an appropriate tuition. He believes that the infant/instructor ratio in his center should be no higher than 5 infants to one instructor. The center would have no food costs for the infants. Compton will only agree to Friedmans suggested changes if the center will continue to operate at or above the current profit level. CASE 9A MIDDLEHURST HOUSE REVIEW PAPER Questions: 1. Look at each decision separately, as incremental to the current situation, and evaluate the marginal profit: a. If class size is decreased (keeping the same 80 students), what increase in tuition is necessary to keep the current monthly profit level? b. Without regard to (a), is it profitable to create the new class from the waiting list? Explain. c. Use the new fee structure as found in (a). Is it profitable to move to smaller class sizes, if new full classes are created and filled to their new maximums using the waiting list? Show calculations. d. Is a class for infant care profitable if tuition is the same as the proposed class tuition for the 2-to-3 age group? 2. Write a brief memo to Friedman and Compton highlighting any concerns that underlie the analyses you have performed in Part 1. CASE 9A MIDDLEHURST HOUSE REVIEW PAPER Order Now

ADDITIONAL INFORMATION 

MIDDLEHURST HOUSE DAYCARE REVIEW

Introduction

The best way to ensure that your child has a great daycare experience is to plan ahead. A well-rounded education is crucial for children, so it’s important to make sure they are getting the time they need in the classroom and outside of it. This article will help you find the right daycare for your family so that you have peace of mind when they arrive each morning at school or after-school program.

Everyone Needs a Day Care

Daycare is important for a child’s development. Children who attend daycare have more opportunities to socialize with other children, learn new things, and develop skills that will help them as they grow up.

Daycare can also be helpful for parents by providing them with a break from the stress of parenting. When you’re busy taking care of your child all day long without much time for yourself (and vice versa), it can be hard to find time for yourself or your loved ones! Daycare allows you both an opportunity to take care of yourselves while still getting some peace and quiet at home during the day when you need it most.

Tips for Choosing the Right One

• Make sure the daycare is licensed. If you are not sure, ask them to provide you with an official license from their state or local government.

• Check for the ratio of children to caregivers. This should be no more than 1:10, but no less than 1:8 (a ratio that allows for one adult to attend each child without supervision). It’s also important that there is someone on-site who can help if there are emergencies such as sickness or injury, as well as someone who knows how to handle issues like tantrums and meltdowns when they happen. In addition, make sure there is someone available 24/7 so parents don’t have worry about leaving their kids unattended at all times; otherwise this puts too much pressure on families who may already struggle financially without extra expenses added onto it!

• See if their reputation has been good – check reviews online first before deciding whether or not it’s worth visiting personally first hand.”

Finding the right daycare is not easy but it is very important for a child’s developement.

Finding the right daycare is not easy but it is very important for a child’s developement.

There are many things to consider when choosing a daycare for your child. The first step in finding the right one is to ask yourself what kind of environment you want your child to grow up in, how much time do you have available and what type of care do you want them get?

You also need to evaluate if they will be able to spend time with other kids their age or if they would need more attention because of their age or illness (for example ADHD). If they are too young then they might benefit from being placed at an older age group which might mean extra costs like paying fees per month instead of per week etcetera…

Conclusion

We hope that this article has helped you to choose a daycare for your child. If you have any questions or concerns, please feel free to contact us at info@middelhirsthouse.com