Question 10.5.4: The TW Care Charity has just completed an overseas aid progr...
The TW Care Charity has just completed an overseas aid programme to assist homeless orphans. Cost and revenue data concerning the programme are as follows
£
Income from donations 157,750
Grants received from government and others 62,000
Fundraising costs 23,900
Direct staff costs, including travel and insurance 68,800
Medical supplies and temporary accommodation 78,120
Food, blankets and clothes 17,100
Transport costs 24,300
Other direct costs 9,800
Apportioned administrative support costs 13,200
Requirement
Prepare a statement to enable managers to monitor the total net cost of the aid programme, highlighting any subtotals that you think may be useful to the managers
TW Care Charity
Report on overseas aid programme
£ £
Income from donations 157,750
Grants received from government and others 62,000
Gross revenue 219,750
Less fundraising costs 23,900
Net revenue 195,850
Direct staff costs, including travel and insurance 68,800
Medical supplies and temporary accommodation 78,120
Food, blankets, clothes 17,100
Transport costs 24,300
Other direct costs 9,800
Total direct cost 198,120
Net direct cost of programme (2,270)
Apportioned administrative support costs 13,200
Total net cost of programme 15,470
Points to note about the statement are as follows.
● The fundraising costs are netted off against the gross revenue. Managers can use the resulting net revenue to monitor the effectiveness of the fundraising activities undertaken.
● Direct costs of the programme are highlighted separately. Managers are able to see whether the net revenue from the fundraising efforts was sufficient to cover the directly identifiable costs of undertaking the programme. In this case, the direct costs exceeded the net fundraising revenue by £2,270.
● Administrative support costs are apportioned so that managers can see the final net impact of this programme on the charity’s resources.