ADM 3346 Intermediate Management Accounting Summer 2025 Assignment 2 ABC and CVP Your assignment submission must be typed up in either Word or Excel and uploaded (one file only Excel preferred) to the assignment drop-box before midnight Tuesday May 20. Question 1 Capital University has four departments. Each student takes 10 classes per year, and only takes course in their own faculty. The only sources of revenue are tuition and government grants. The University receives a grant of $10,000 a year for each student. Cost information is as follows Salaries 15,500,000 | Each professor teaches 6 classes per year and each get paid the same amount. Building 13,020,000 | Each classroom is the same size. Student Support and 195,000,000 | Each student generally requires an equal amount of support Administration 17,000,000 | Science labs $10 million, Business trading room $2 million, Engineering labs $5 million a a a a Number of classes per year | 120] ~s.198 | Number of Students in Faculty 4,800 2,000 a0 a 2,700 8 100 Student enrollment: 240,520,000 in total costs divided by 10,100 students, less the government grant of $10,000 per student) REQUIRED A. Using Activity Based Costing, calculate how much tuition should be charged per student in each faculty in order for the university to break even. (you will need to allocate each cost in a reasonable way) B. Compare the results between the current methodology and cost per student based on Activity Based Costing and briefly comment on who is likely being cross-subsidized. C. How much should each department be charging for tuition in order for each department to break-even. Which faculty has the highest tuition? D. Based on your analysis, what can the University do to lower the cost per student for the faculty that has the highest overall cost per student? ' Requirement A. J : Item Amount Cost Driver 5} Salaries 15,500,000 # of classes | Building 13,020,000 # of Classes Student Support and Administrati 195,000,000 # of Students in Faculty 3 Other 17,000,000 Traceable to Faculties " Total 240,520,000 i )/Based on cost diver above, Cost allocation by Faculty is calculated as below: ' Arts Science Engineering Business Total || # of Classes per Year 120.00 198.00 150.00 150.00 618.00 | ast 19.42% 32.04% 24.27% 24.27% 100.00% '| Salaries Allocation 3,009, 708.74 4,966,019.42 3,762,135.92 3.762,135.92 15,500,000.00 | Building Allocation 2,528,155.34 4,171,456.31 3,160,194.17 3,160,194.17 13,020,000.00 ' 3| # of Students in Faculty 4,800.00 2,000.00 600.00 2,700.00 10,100.00 "| As % 47.82% 19.80% 5.94% 26.73% 100.00% $) Student Support Allocation 92.673, 267.33 38,613,861.39 11,584,158 42 2,128, 712.87 195,000,000.00 1 )| Other Costs per Note above = 10,000,000.00 $000,000.00 2,000.000.00 17,000,000.00 +| Total Cost 98,2171,131.40 of,791,337.11 23,506 ,486.51 61.051,042.97 240,520,000.00 || Costs per student are as below: H Arts Science Engineering Business Total 3) Total Cost (3) 98,211,131.40 57,751,337.11 23,506 ,486.51 61,051,042.97 240,520,000.00 | Students 4,600.00 2,000.00 600.00 2,700.00 10,100.00 :_Cost per Student ($) 20,460.65 28,875.67 39,177.48 22,611.50 23,813.86 ) Threfore, Net Tuition Required Per Student: L Arts Science Engineering Business Total '| Cost per Student (3) 20,460.65 26,875.67 39,177.48 22,611.50 23,813.86 3) Less Government Grant per above 10,000.00 10,000.00 10,000.00 10,000.00 NAL | [Required Tuition ($) 10,460.65 18,875.67 29,177.48 12,611.50