Dean Montoya is considering increasing the number admitted into an MBA program from 400 to 450. She anticipates that the increase will add eight sections in total. Staffing ratios have usually run about 1 staff person per 50 students.
Required:
Using account classification, estimate the increase in the following costs because of the decision to increase enrollment.
Student related variable costs.................... $2,500 per student per year
Faculty related costs............................. $150,000 per faculty member.
Each professor teaches four sections per year.
Administration costs ...........................$60,000 per full time employee
Building maintenance ..........................................$150,000 per year