Lackawanna Community College has three divisions: Liberal Arts, Sciences, and Business Administration. The college’s comptroller is trying to decide how to allocate the costs of the Admissions Department, the Registrar’s Department, and the Computer Services Department. The comptroller hascompiled the following data for the year just ended. Department Annual CostAdmissions ................................................................................................... $ 90,000Registrar ............................................................................................................ 150,000Computer Services ......................................................................................... 320,000 Division Budgeted Budgeted Planned Courses Enrollment Credit Hours Requiring Computer WorkLiberal Arts ............. 1,000 30,000 12Sciences ................... 800 28,000 24Business Administration 700 22,000 24 Required:1. For each department, choose an allocation base and distribute the departmental costs to the college’s three divisions. Justify your choice of an allocation base.2. Would you have preferred a different allocation base than those available using the data compiled by the comptroller? Why?3. Build a spreadsheet: Construct an Excel spreadsheet to solve requirement (1) above. Show how the solution will change if the following information changes: the costs incurred by the departments were $120,000, $160,000, and $360,000, for Admissions, Registrar, and Computer Services,respectively.
Lackawanna Community College has three divisions: Liberal Arts, Sciences, and Business Administration. The college’s comptroller is trying to decide how to allocate the costs of the Admissions Department, the Registrar’s Department, and the Computer Services Department. The comptroller has
compiled the following data for the year just ended.
Department Annual Cost
Admissions ................................................................................................... $ 90,000
Registrar ............................................................................................................ 150,000
Computer Services ......................................................................................... 320,000
Division Budgeted Budgeted Planned Courses
Enrollment Credit Hours Requiring Computer Work
Liberal Arts ............. 1,000 30,000 12
Sciences ................... 800 28,000 24
Business Administration 700 22,000 24
Required:
1. For each department, choose an allocation base and distribute the departmental costs to the college’s three divisions. Justify your choice of an allocation base.
2. Would you have preferred a different allocation base than those available using the data compiled by the comptroller? Why?
3. Build a spreadsheet: Construct an Excel spreadsheet to solve requirement (1) above. Show how the solution will change if the following information changes: the costs incurred by the departments were $120,000, $160,000, and $360,000, for Admissions, Registrar, and Computer Services,
respectively.
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