| |
Workings
It is necessary to apportion the head office charge and deduct it from the overhead figure.
|
|
Head Office
|
Total |
Specific |
Finglas |
500000÷2254x920 |
€204,082 |
€280,000 |
€75,918 |
Merrion |
500000÷2254x736 |
€163,265 |
€220,000 |
€56,735 |
Baldoyle |
500000÷2254x598 |
€132,653 |
€180,000 |
€47,437 |
|
|
€500,000 |
|
€180,000 |
a i) Marginal cost statement - original budget
|
Finglas |
Merrion |
Baldoyle |
Total |
|
€ |
€ |
€ |
€ |
Rent receipts |
920,000 |
736,000 |
598,000 |
2,254,000 |
|
|
|
|
|
Property upkeep |
347,000 |
273,000 |
341,000 |
961,000
|
Wages and salaries |
118,000 |
102,000 |
74,000 |
294,000
|
Overheads |
75,918 |
56,735 |
47,347 |
180,000 |
Total |
540,918 |
431,735 |
462,347 |
1,435,000 |
|
|
|
|
|
'Site' profit |
379,082 |
304,265 |
135,653 |
819,000 |
Head office |
|
|
|
500,000 |
Net profit |
|
|
|
319,000 |
a ii) Marginal cost statement - after closure of Baldoyle
|
Finglas |
Merrion |
Total |
|
€ |
€ |
€ |
Rent receipts |
920,000 |
736,000 |
1,656,000 |
|
|
|
|
Property upkeep |
347,000 |
273,000 |
620,000 |
Wages and salaries |
118,000 |
102,000 |
220,000 |
Overheads |
75,918 |
56,735 |
132,653 |
Total |
540,918 |
431,735 |
972,653 |
|
|
|
|
'Site' profit |
379082 |
304265 |
683,347 |
Head office |
|
|
500,000 |
Net profit |
|
|
183,347 |
b) Recommendation
The Baldoyle complex should remain open. It is contributing €135,652 towards head office costs and profits. If it is closed the profit of the organisation will reduce by €135,653 from €319,000 to €183,347.
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