Cost Analysis of different services

Running Head: Cost Analysis of different services

Cost Analysis of different services 1
Question 1
Part 1:
At 100 % of rides
Original No. of rides
Total operating cost
Supplies cost $ 2,500.00
Insurance (1750*2) $ 3,500.00
Salary and Wages cost
Supervisor $ 46,000.00
Coordinator (6*17*50*20) $ 102,000.00
Cost of carrying passengers (5000*0.35*5) $ 8,750.00
Total cost (A) $ 162,750.00
Grant per year $ 150,000.00
Donations from seniors (500*0.75*0.8)
$
300.00
(B) $ 150,300.00
Net Loss (B-A) -$ 12,450.00
Assumption: It is assumed that in each ride there are 10 seniors travelling per bus.
Therefore, the number of rides will be calculated as below
Total No. of Passengers 5000
No. of passengers per ride (10 seniors x 2 busses) 20
No. of rides 250
When number of rides increase by 10%
110% No. of rides
Total operating cost
Supplies cost $ 2,500.00
Insurance (1750*2) $ 3,500.00
Salary and Wages cost
Supervisor $ 46,000.00
Coordinator (6*17*50*20) $ 102,000.00
Cost of carrying passengers (5500*0.35*5) $ 9,625.00
Total cost $ 163,625.00
Grant per year $ 150,000.00
Donations from seniors (275*0.75*0.8) $ 165.00
$ 150,165.00

Cost Analysis of different services 2
Net Loss -$ 13,460.00
If there is 10% increase in the number of
rides
No. of original rides
25
0
Add: Increase in rides (500*10%) 25
No. of new rides
27
5
When number of rides is decreased by 10%
90% No. of rides
Total operating cost
Supplies cost $ 2,500.00
Insurance (1750*2) $ 3,500.00
Salary and Wages cost
Supervisor $ 46,000.00
Coordinator (6*17*50*20) $ 102,000.00
Cost of carrying passengers (4500*0.35*5) $ 7,875.00
Total cost $ 161,875.00
Grant per year $ 150,000.00
Donations from seniors (225*0.75*0.8) $ 135.00
$ 150,135.00
Net Loss -$ 11,740.00
When only 50% of seniors could afford donation
Total operating cost
Supplies cost $ 2,500.00
Insurance (1750*2) $ 3,500.00
Salary and Wages cost
Supervisor $ 46,000.00
Coordinator (6*17*50*20) $ 102,000.00
Cost of carrying passengers (5000*0.35*5) $ 8,750.00
Total cost $ 162,750.00
Grant per year $ 150,000.00
Donations from seniors (250*0.75*0.50) $ 93.75
$ 150,093.75