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:

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

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

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

Distribute the departmental costs to the college’s three divisions based on the allocation base given. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)

	Division Department and Allocation Base Liberal Arts Sciences Business Administration Total Cost Allocated Admissions (enrollment) $0 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

Requirement 1
Given data
Division	Budgeted Enrollment	Budgeted Credit Hours	Planned Coursed Requiring computer work
Liberal Arts	2300	43000	25.00
Sciences	1450	37750	37.00
Business Administration	1350	31750	37.00
Totals	5100	112500	99.00
Summary table of Department Expenses assigned to Divisions
Departments	Allocation Basis	Liberal Arts	Sciences	Business Administration	Total
Admissions	Enrollment	58,627	36,961	34,412	1,30,000
		130000/5100X2300	130000/5100X1450	130000/5100X1350
Registrar	Credit Hours	84,471	74,158	62,371	2,21,000
		221000/112500X43000	221000/112500X37750	221000/112500X31750
Computer services	Courses requiring computer	1,18,182	1,74,909	1,74,909	4,68,000
		468000/99X25	468000/99X37	468000/99X37
Totals		2,61,280	2,86,028	2,71,692	8,19,000
Requirement 2
Better Allocation base to following Departments
Registrar	Credit Hours
Computer services	Courses requiring computer