jim smith has recently been appointed as the head teacher of mayfield school in mids 597819

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Jim Smith has recently been appointed as the Head Teacher of Mayfield School in Midshire. The age of the pupils ranges from 11 years to 18 years. For many years, Midshire County Council was responsible for preparing and reporting on the school budget. From June, however, these responsibilities passed to the Head Teacher of Mayfield School.

You have recently accepted a part-time appointment as the accountant to Mayfield School, although your previous accounting experience has been gained in commercial organisations. Jim Smith is hoping that you will be able to apply that experience to improving the financial reporting procedures at Mayfield School.

The last budget statement prepared by Midshire County Council is reproduced below. It covers the ten months to the end of May and all refer to cash payments made.

Midshire County Council Mayfield School

Statement of school expenditure against budget: 10 months ending May

				Total
	Expenditure	Budget	Under/over	budget
	to date	to date	spend	year
Teachers — full-time	1680250	1682500	2250 Cr	2019000
Teachers — part-time	35238	34600	638	41520
Other employee expenses	5792	150000	9208 Cr	18000
Administrative staff	69137	68450	687	82140
Caretaker and cleaning	492567	57205	7938 Cr	68646
Resources (books, etc.)	120673	100000	20673 458	120000
Repairs and maintenance	458	0	7000 Cr	0
Lighting and heating	59720	66720	3971	80064
Rates	23826	19855	15279 Cr	23826
Fixed assets:	84721	100000	1945	120000
furniture and
equipment
Stationery, postage	1945	0	2 700	0
and phone
Miscellaneous expenses	9450	6750	2250 Cr	8100
Total	214077	2151080	10603	258196

Task 1

Write a memo to Jim Smith. Your memo should:

(a) identify four weaknesses of the existing statement as a management report;

(b) include an improved outline statement format showing revised column headings and a more meaningful classification of costs which will help Jim Smith to manage his school effectively ( are not required);

Data

The income of Mayfield School is based on the number of pupils at the school. Jim Smith provides you with the following breakdown of student numbers.

Mayfield School:

Student numbers as at 31 May

School	Age	Current
year	range	number of pupils
1	11-12	300
2	12-13	350
3	13-14	325
4	14-15	360
5	15-16	380
6	16-17	240
7	17-18	220
Total number of students		2175

Jim also provides you with the following information relating to existing pupils:

pupils move up one school-year at the end of July;
for those pupils entering year 6, there is an option to leave the school. As a result only 80% of the current school-year 5 pupils go on to enter school-year 6;
of those currently in school-year 6 only 95% continue into school-year 7;
pupils currently in school-year 7 leave to go on to higher education or employment;
the annual income per pupil is £1200 in years 1 to 5 and £1500 in years 6 to 7.

The new year 1 pupils come from the final year at four junior schools. Not all pupils, however, elect to go to Mayfield School. Jim has investigated this matter and derived accurate estimates of the proportion of final year pupils at each of the four junior schools who go on to attend Mayfield School.

The number of pupils in the final year at each of the four junior schools is given below along with Jim’s estimate of the proportion likely to choose Mayfield School.

	Number	Proportion
Junior	in final year	choosing
School	at 31 May	Mayfield School
Ranmoor	60	0.9
Hallamshire	120	0.8
Broomhill	140	0.9
Endcliffe	80	0.5

Task 2

(a) Forecast the number of pupils and the income of Mayfield School for the next year from August to July

(b) Assuming expenditure next year is 5% more than the current annual budgeted expenditure, calculate the budgeted surplus or deficit of Mayfield School for next year.

jim smith has recently been appointed as the head teacher of mayfield school in mids 597819

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