As a non-profit company, Shelter Partnership’s cost information is slightly varied from that of a profit driven company. Instead of a revenue stream generated by setting price points and realized product sold volumes, its’ revenues are generated from foundations, private fundraisers, grants, and other miscellaneous forms of income. They also receive income through contracts with local government divisions.
Shelter Partnership’s “Statement of Revenues and Expenses” shows that the purpose of their cost information is to visualize how resources are allocated throughout the company and how that allocation compares to the actual consumption of resources. In doing this, it offers Ruth Schwartz a quick glance at where she may be overstating or understating …show more content…
Based on the information given within the company background, the cost objects are divided into four different divisions; technical assistance, program development, public policy support, and direct material assistance. The revenues and expenses outlined by the statement in Exhibit 1 are a compilation of the inflow and outflow of money that exist to continue these four services. The expenses are broken down into three main categories; personnel, other expenses, and independent …show more content…
Schwartz has, we must understand her end goal. As stated in the case, “showing higher expenses for the Resource Bank might make some donors more sympathetic with her fundraising efforts for the Banks”. If this is truly the case, Ruth may want to think about how she wants to represent the costs associated with the Resource Bank. Currently, the resource allocation data shows that a substantial amount of the costs are directed at the Resource Bank. Although Ruth needs to be careful in the way she represents the budgeted cost allocations due to potential ethical issues, she may want to be creative in order to generate more fundraising opportunities for a sector of the business. She should definitely account for the cost of the space being given to the company by GSA ($110,000) as well as the shifting the insurance coverage to provide better coverage of the warehouse. These would both represent more cost going towards the Resource Bank. The $110,000 storage space rental fee that Shelter Partnerships could potentially incur if GSA made them pay is actually quite cheaper than some of the spaces Ms. Schwartz priced. To use space other than what GSA has given, it would cost roughly $486,000 ($1.35 per square foot x 30,000 square feet x 12 months) per year. Regardless of the way Ms. Schwartz chooses to represent the cost and revenue flows throughout the company, it all boils down to how she wants the data presented in order to make business oriented
Shelter Partnership’s “Statement of Revenues and Expenses” shows that the purpose of their cost information is to visualize how resources are allocated throughout the company and how that allocation compares to the actual consumption of resources. In doing this, it offers Ruth Schwartz a quick glance at where she may be overstating or understating …show more content…
Based on the information given within the company background, the cost objects are divided into four different divisions; technical assistance, program development, public policy support, and direct material assistance. The revenues and expenses outlined by the statement in Exhibit 1 are a compilation of the inflow and outflow of money that exist to continue these four services. The expenses are broken down into three main categories; personnel, other expenses, and independent …show more content…
Schwartz has, we must understand her end goal. As stated in the case, “showing higher expenses for the Resource Bank might make some donors more sympathetic with her fundraising efforts for the Banks”. If this is truly the case, Ruth may want to think about how she wants to represent the costs associated with the Resource Bank. Currently, the resource allocation data shows that a substantial amount of the costs are directed at the Resource Bank. Although Ruth needs to be careful in the way she represents the budgeted cost allocations due to potential ethical issues, she may want to be creative in order to generate more fundraising opportunities for a sector of the business. She should definitely account for the cost of the space being given to the company by GSA ($110,000) as well as the shifting the insurance coverage to provide better coverage of the warehouse. These would both represent more cost going towards the Resource Bank. The $110,000 storage space rental fee that Shelter Partnerships could potentially incur if GSA made them pay is actually quite cheaper than some of the spaces Ms. Schwartz priced. To use space other than what GSA has given, it would cost roughly $486,000 ($1.35 per square foot x 30,000 square feet x 12 months) per year. Regardless of the way Ms. Schwartz chooses to represent the cost and revenue flows throughout the company, it all boils down to how she wants the data presented in order to make business oriented