Eastern State University (ESU) is preparing its master budget for the upcoming academic year. Currently, 12,000 students are enrolled on campus; however, the admissions office is forecasting a 5 percent growth in the student body despite a tuition hike to $ 75 per credit hour. The following additional information has been gathered from an examination of university records and conversations with university officials:
ESU is planning to award 180 tuition- free scholarships.
The average class has 25 students, and the typical student takes 15 credit hours each semester. Each class is three credit hours. ESU operates two semesters per year and has no summer term.
ESU’s faculty members are evaluated on the basis of teaching, research, and university and community service. Each faculty member teaches fives classes during the academic year.

1. Prepare a tuition revenue budget for the upcoming academic year.
2. Determine the number of faculty members needed to cover classes.
3. Assume there is a shortage of full- time faculty members. List at least five actions that ESU might take to accommodate the growing student body.
4. You have been requested by the university’s administrative vice president (AVP) to construct bud-gets for other areas of operation (e. g., the library, grounds, dormitories, and maintenance). The AVP noted: “The most important resource of the university is its faculty. Now that you know the number of faculty needed, you can prepare the other budgets. Faculty members are indeed the key driver—without them we don’t operate.” Does the administrative vice president really understand the linkages within the budgeting process? Explain.

  • CreatedApril 22, 2014
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