Lerner College, a not-for-profit liberal arts college, charges the total cost of running its research library to its three academic programs: the humanities, the social sciences, and the sciences. Rent and utilities for the library space costs $30,000 per month. Salaries for the library’s employees total $275,000 per year, plus an additional 24% for benefits. The depreciation on the library's office equipment is $32,000 each year. Other library expenses – including supplies, books, subscriptions – are equal to $14,000 per month. The total cost of running the research library is allocated to each of the three academic programs based on the number of students in each of the three programs. The humanities program has 440 students; the social sciences program has 390 students; the sciences program has 260 students. The teaching staff for the social sciences program earns $650,000 per year in salaries and benefits. In addition, the social sciences program consumes $9,500 of supplies each month, while the other two programs combined consume only $7,250 of supplies each month. Fill in the following blanks: [Note: Round your numbers to TWO decimal places] A) Annual direct cost of running the social sciences program is: $_____________ B) Annual indirect costs allocated to the humanities program are: $ _______________ C) Annual indirect costs allocated to the social sciences program are: $ _____________

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Lerner College, a not-for-profit liberal arts college, charges the total cost of running its research library to its three academic programs: the humanities, the social sciences, and the sciences. Rent and utilities for the library space costs $30,000 per month. Salaries for the library’s employees total $275,000 per year, plus an additional 24% for benefits. The depreciation on the library's office equipment is $32,000 each year. Other library expenses – including supplies, books, subscriptions – are equal to $14,000 per month. The total cost of running the research library is allocated to each of the three academic programs based on the number of students in each of the three programs. The humanities program has 440 students; the social sciences program has 390 students; the sciences program has 260 students. The teaching staff for the social sciences program earns $650,000 per year in salaries and benefits. In addition, the social sciences program consumes $9,500 of supplies each month, while the other two programs combined consume only $7,250 of supplies each month.

Fill in the following blanks:

[Note: Round your numbers to TWO decimal places]

A) Annual direct cost of running the social sciences program is: $_____________

B) Annual indirect costs allocated to the humanities program are: $ _______________

C) Annual indirect costs allocated to the social sciences program are: $ _____________

D) Annual indirect costs allocated to the sciences program are: $ __________________

E) Annual rent and utilities + depreciation expense = $ _______________

F) The cost per student of running the social sciences program is: $ ______________

G) The total cost to run the social sciences program is: $ __________________

 

 

 

 

 

 

 

 

 

 

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