Question 1

What is the average teacher salary for the Regular Instruction and Special Education Programs?

The average teacher salary for the regular teachers, substitute teacher and the aide have been calculated on the basis of 1 teacher being required for 15 students for regular instruction and 1 teacher being required for 6 students in special education program. These are shown in the table below:

AVERAGE TEACHER SALARY

Regular Instruction Program Special Education Program

Number of registered students 615 75

Student: Teacher Ratio 15 6

Total Number of Teachers 41 13

Regular teacher salaries $1,119,300 $376,875

Average Teacher Salary $27,300 $30,150

Substitute teacher salaries 37200 12500

Average Substitute teacher salary 907 1000

Aide salaries 20300 9100

Average Aide Salary 495 728

Question 2

Please analyze the costs in the category "Direct Costs- Instruction," and classify each line item as fixed, variable, semi-variable, or step-function. If variable, semi variable, or step-function, please indicates specifically how the cost behaves. How, if at all, is this analysis useful to Ms. Cook?

The analysis and behavior of each of the costs in the category: Direct Costs – Instructions is performed below for each line item:

a). Regular Teach Salaries

The regular teacher salaries can be analyzed by looking at the number of students that can be handled by a teacher at one time. The case states that according to Mr. Hartman each teacher can handle a maximum of 15 students. If the number of the students increases from 15 to 16 then one additional teacher will have to be hired and full average salary would be paid to the teacher. Therefore, the changes in the regular teacher salaries are because of the discrete points and not with the changes in activity volume (the students). Therefore, regular teacher salaries are a step cost.

b). Substitute Teacher Salaries

The substitute teachers are dependent on the number of the regular teachers substituting. For example, regular teachers substitute regularly during the break periods regularly that are out sick. As the number of sick teachers increases, the substitute teachers also increase however, with regard to the change in volume, an increase in the number of students does not necessarily increase the substitute teacher salaries. Therefore, substitute teacher salaries can be considered as semi variable cost.

Moray Junior High School Harvard Case Solution & Analysis

c). Aide Salaries

The aide was dependent on the number of the number of substitutes and they would thus follow the same pattern as above. Therefore, these costs are also semi variable costs.

d). Instructional Supplies & Library

The instructional supplies and the library costs increase in the direct proportion to the number of students. Therefore, these would be categorized as variable costs.

e).Travel & Lodging

Only the Spanish Language Program incurs costs of $ 3000 for travel and lodging. These costs do not change in line with the number of students so these can be considered as fixed costs.

f). Depreciation

Depreciation would be a fixed cost because the same amount is incurred in each period throughout the entire useful life of the asset.

This analysis and the study of the behavior of all the above costs would be useful to Ms. Cook because she can target the flexible costs that can be changed without affecting the performance and the needs of the high school. She can first target the step costs and make a better use of these costs and then she can target the variable and semi variable costs and make adjustments to reduce the annual budget for the year............

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