Please do not give solution in image format ?. Munoz Academy is a profit-oriented education business. Munoz provides remedial training for high schoolstudents who have fallen behind in their classroom studies. It charges its students $1,410 per course. During theprevious year, Munoz provided instruction for 1,000 students. The income statement for the company follows:RevenueCost of instructorsOverhead costsNet incomeThe company president, Andria Rossi, indicated in a discussion with the accountant, Sam Trent, that she wasextremely pleased with the growth in the area of computer-assisted instruction. She observed that thisdepartment served 200 students using only two part-time instructors. In contrast, the classroom-basedinstructional department required 32 instructors to teach 800 students. Ms. Rossi noted that the per-student costof instruction was dramatically lower for the computer-assisted department. She based her conclusion on thefollowing information:$ 1,410,000(884,000)(295,000)$ 231,000Munoz pays its part-time instructors an average of $26,000 per year. The total cost of instruction and the cost perstudent are computed as follows:Type of InstructionNumber of instructors (a)Number of students (b)Total cost (c = a × $26,000)Cost per student (c + b)Type of instructionComputer-Assisted2200$ 52,000$ 260Assuming that overhead costs were distributed equally across the student population, Ms. Rossi concluded thatthe cost of instructors was the critical variable in the company's capacity to generate profits. Based on heranalysis, her strategic plan called for heavily increased use of computer-assisted instruction.Total costCost per studentMr. Trent was not so sure that computer-assisted instruction should be stressed. After attending a seminar onactivity-based costing (ABC), he believed that the allocation of overhead cost could be more closely traced to thedifferent types of learning activities. To facilitate an activity-based analysis, he developed the followinginformation about the costs associated with computer-assisted versus classroom instructional activities. Heidentified $216,000 of overhead costs that were directly traceable to computer-assisted activities, including thecosts of computer hardware, software, and technical assistance. He believed the remaining $79,000 of overheadcosts should be allocated to the two instructional activities based on the number of students enrolled in eachprogram.Classroom32800$Requireda. Based on the preceding information, determine the total cost and the cost per student to provide coursesthrough computer-assisted instruction versus classroom instruction. (Do not round intermediate calculations.Round "Cost per student" to 2 decimal places.)Computer-Assisted832,000$ 1,040Classroom

It is the amount incurred on conducting a business activity. In the given case, the company incurrs…

Munoz Academy is a profit-oriented education business. Munoz provides remedial training for high school students who have fallen behind in their classroom studies. It charges its students $1,410 per course. During the previous year, Munoz provided instruction for 1,000 students. The income statement for the company follows: Revenue Cost of instructors Overhead costs Net income $ 1,410,000 (884,000) (295,000) $ 231,000

Munoz Academy is a profit-oriented education business. Munoz provides remedial training for high school students who have fallen behind in their classroom studies. It charges its students $1,410 per course. During the previous year, Munoz provided instruction for 1,000 students. The income statement for the company follows: Revenue Cost of instructors Overhead costs Net income $ 1,410,000 (884,000) (295,000) $ 231,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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