CASE 9A – MIDDLEHURST HOUSE

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 Friedman’s

salary, are split 75 percent for Compton and 25 percent for Friedman.

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

2 to 3 2 10 20 $320

3 to 4 1 15 15 280

4 to 5 1 15 15 280

5 to 6 2 15 30 260

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 personAccounting
: Master
: Essay
: English (U.S.)
: 2 pages/550 words
:APA one source. Due in 20 hours

Middlehurst House
Complete:Case 9A (Middlehurst House)

In this case, management is presented with several decision options. For this assignment, you are required to provide a two to three single-spaced written memo evaluating options and providing recommendations. The written memo should be properly formatted according to APA guidelines and demonstrate research and critical thinking skills. Evaluations and recommendations should be supported by at least four scholarly sources from the Ashford University Library or other external sources, excluding the textbook.
In Question 1, evaluate each decision separately in full detail including calculations, as necessary. The evaluation should be included as part of the memo discussion, not a separate component. Evaluations can be included as appendices, exhibits or figures; however must be properly referenced within the written content.
In Question 2, prepare a comprehensive business memo addressing each decision and your recommendation. The memo should be properly formatted as a business memo and formatted according to APA guidelines.
An example of a properly formatted business memo can be found at this link
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Week 5 Written Assignment should:

Demonstrate graduate level work including appropriate research and critical thinking skills.
Be presented as a business memo (not a question/answer format).
Incorporate case questions into the overall analysis.
Follow APA formatting guidelines including title page, reference page and in-text citations.
Consists of two to three single-spaced pages of content.
Provide at least four scholarly sources, excluding the textbook.

Carefully review theGrading Rubric(Links to an external site.)for the criteria that will be used to evaluate your assignment.