Types of costs
Directors make better decisions when they know how a cost behaves.
| Cost type | What it means | Child care examples |
|---|---|---|
| Fixed | Stays the same when enrollment changes | Rent, insurance, director salary |
| Variable | Rises and falls with the number of children | Food, classroom supplies, card processing fees |
| Step-fixed | Stays flat until a limit is reached, then jumps | Teaching staff: a room needs the same teachers until it reaches its ratio |
| Classroom (direct) | Belongs to one classroom | Teachers assigned to the infant room |
| Overhead (shared) | Supports the whole program | Director, office staff, rent, utilities, bookkeeping |
Staffing is the most important example. Adding one preschooler does not add a teacher until the room reaches its ratio. Losing one preschooler does not remove a teacher either. That is why each empty seat costs a program almost the full tuition for that seat.