Define break-even analysis and list the steps involved in calculating a break-even financial situation

Question

What will be an ideal response?

Answer 1

ANSWER:
A break-even analysis is determining
how many enrolled children and at what tuition will be needed to offset expenses and operational costs.
?
The steps involved in determining a center’s financial break-even costs are: 1) Calculate fixed cost that must be paid no matter how many children are enrolled. Fixed costs include rent, phone, utilities, insurance, equipment, salaries and benefits for director, cook, maintenance staff, and secretary and any other non-classroom staff. 2) Determine the number of children you will serve. 3) Based on the number of children per teacher, calculate the number of teachers and the cost of teacher and assistant salaries and their benefits. 4) Based on the number of children; estimate the cost of food and supplies. 5) Add the costs to be incurred (items 1, 3, and 4). 6) Divide the total (from line 5) by the number of children.
7)
The dollar figure in line 6 represents the amount you will have to receive in tuition to break even.