Question

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	$	130,000
Registrar		221,000
Computer Services		468,000

  

Division	Budgeted Enrollment			Budgeted Credit Hours			Planned Courses Requiring Computer Work
Liberal Arts		2,300			43,000			25
Sciences		1,450			37,750			37
Business Administration		1,350			31,750			37

  

Required:

1. Distribute the departmental costs to the college’s three divisions based on the allocation base given.

2. Choose the better allocation base for distributing the cost to the following departments:

Division Department and Allocation Base Liberal Arts Sciences Business Administration Total Cost Allocated Admissions (enrollment) $1,350 $1,350 Registrar (credit hours) $0 Computer Services (courses requiring computer) $0

• Choose the better allocation base for distributing the cost to the following departments:

  	Registrar Computer Services

Answer 1

Required 1
					liberal	Sciences	Business	Total cost
Department and Allocation Base					Arts		Administration	Allocated
Admissions (enrollment)					58627	36961	34412	130000
Registrar	(credit hours)				84471	74158	62371	221000
computer services (courses requiring computer)					118182	174909	174909	468000
Required 2
Registrar		Enrollment
computer services		credit hours