Question

QUESTION 3
Schools across Ghana have been closed down. This is to curb the spread of the fast-spreading
coronavirus (COVID- 19). The news portal, the Ghanaweb reported this on the 16th March 2020.
Since then, school fees and feeding fee collection from parents has come to a standstill. “Yet the
payment of bills such as salaries, rent, electricity bill, water bill has not come to a standstill”
lamented Mr. Amuzu, the headmaster of Twinkle Tots International school in a telephone
conversation with Mr. Berko- the school’s accountant. Mr. Berko decided to offer some advice
to Mr. Amuzu on how the school could settle its outstanding bills due in the next six months.
This way, the school could continue to stay afloat. What advice do you think Mr. Berko offered
to Mr. Amuzu on settling the school's bills? Discuss comprehensively.

Answer 1

Solution:-

      This is a common case during the time of COVID-19.Many of shops ,schools ,offices etc are closed to reduce the spreading of COVID-19 among the peoples. During this time schools, shops ,offices, Commercial establishment are willful to pay the Fixed costs like Salaries, Rent, Electricity etc..to the person who supplying the same. But ,Due to this time no reestablishment receiving income from their customers .During this time many of establishments not covering their Break Even .

      In the Above case Schools of Gaana have been closed down due to the COVID-19 .Main income of school is school fees and feeding fee. But the fixed cost always standstill. we can overcome from this pandemic situation with some solutions,we will need to cut some costs as critically as you can.

    Mr.Amuzu you have Four ways to cut the costs effectively

a)Remove non Essencial Expenses

      During your financial expenses,you would have made three expenses such as Fixed ,Variable and Periodical Expenses.Be very critical during this step.if it doesn’t contribute to the core of the business,remove or cancel it.if it appears that something might be necessary but you aren’t sure ,try to research other solution that might be cheaper or even free.For periodical expenses ,you might be able to defer or reschedule services like respires, Vehicle Maintenance etc..

b)Reduce Fixed Expenses

With service and revenue is in halt, reducing the Fixed cost is the Key.One of the biggest Fixed expense is Rent. Approach the landlord for reduction or an alternate solution.

c)Relief for Loan Repayments

You can also try to use the bank relief for the repayment of bank loan. Most major banks have announced payment holidays during pandemic. You can use this facility to overcome the pandemic situation.

d)Cut Salaries of Teachers

Due to this situation no teachers are coming to the school and they are not working. It is Essential to reduce their monthly wages to a certain extend.

This are the solution to settling the above bills Mr.Amuzu.Use the above ways and cut the required expenses that will help you solve this problem.