Was the overall aggregate variance large enough to have a significant impact on MMWC during the first quarter?

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The Mead Meals on Wheels Center (MMWC) provides meals every day to the homebound elderly. There is no shortage of demand for MMWC’s services among the elderly citizens of Wabash, and MMWC can find qualified recipients for as many meals as it can deliver. Each person helped by MMWC receives two hot meals per day, 7 days per week, for a total of 14 meals every week. For each person MMWC serves per week (that is, for each elderly resident that is served 14 meals per week), the city of Wabash pays MMWC $32.
To service the contract, MMWC has a central kitchen that has the capacity to produce a maximum of 9,600 meals per day. It costs MMWC an average of $36,000 per week to operate the kitchen and other central facilities regardless of the number of meals that MMWC serves. This covers all of MMWC’s fixed costs (e.g., rent, equipment costs, and its personnel including administrative staff) as well as its fixed seasonal service contract costs (utilities, snow removal, etc.).
NOTE: Students will submit a three-to four-page Word document (not including the title and reference pages) The paper should be formatted per APA style as outlined in the approved APA style guide. The main goal of your paper is to write a concise evaluation of the Mead Meals on Wheels program. The paper show include the strengths and weaknesses of the program.

1: The executive director has come to you to calculate how much MMWC can spend per week, per person and still break even. What do you tell the executive director?

2: Prepare a budget for the next four quarters of operation for the executive director and summarize it for the full year.

3: Prepare an analysis of variances for the first quarter of the year to help her understand what caused the differences between the results. Provide her with as much detail as you can given the available information, that is, volume variance, price variance, and quantity variance. Be sure to indicate whether those variances were favorable or unfavorable. Don’t forget to look at the fixed-cost variance as well.
a. Prepare a revenue variance analysis.
b. Prepare a food expense variance analysis.
c. Calculate the net impact of the severe winter weather and lower food prices on MMWC’s first quarter result. Was MMWC better off or worse off?
d. Was the overall aggregate variance large enough to have a significant impact on MMWC during the first quarter? Is it significant when compared to projected annual profits or losses?

4: What do you tell her? Support your recommendation and present your findings in a way that the executive director will understand.

5: Incorporating all of the things that have happened during the year, as well as your capital budgeting recommendation, prepare a new quarterly budget and an annual summary for MMWC for the coming year.

Question 6: Given the profits that MMWC expects to produce in the next fiscal year, should it expand and feed more people? Why has it chosen not to feed more than 5,200 people? What would be required to expand MMWC beyond its current level of operations?

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