M6-12. Stage 1 ABC at a College: Assigning Costs to Activities. An economics pro
ID: 2448852 • Letter: M
Question
M6-12. Stage 1 ABC at a College: Assigning Costs to Activities.
An economics professor at Prince Town University devotes 55 percent of her time to teaching, 35 percent of her time to research and writing, and 10 percent of her time to service activities such as committee work and student advising. The professor teaches two semesters per year. During each semester, she teaches one section of an introductory economics course (with a maximum enrollment of 50 students) and one section of a graduate economics course (with a maximum enrollment of 30 students). Including course preparation, classroom instruction, and appointments with students, each course requires an equal amount of time. The economics professor is paid $135,000 per year.
Required
Determine the activity cost of instruction per student in both the introductory and the graduate economics courses
Please, show calculations.
Explanation / Answer
Total Salary of Economic Professor = $135000 per year
Economic Professor devotes 55% of time to teaching, 35% of time to research and writing and 10% of time to service activities
Therefore, cost of instruction for teaching = $135000 * 55% = $74250
For teaching each course requires equal amount of time.
Therefore, economic professor teaches two semesters each year and during each semester 1 section of introductory economics course and 1 section of graduate economics course which requires equal amount of time.
Therefore, cost of instruction per student as per time devoted for each course =
Introductory economic course = $74250 * 2/4 = $37125
$37125 / 50 = $742.50 per student
Graduate economic course = $74250 * 2/4 = $37125
$37125 / 30 = $1237.50 per student
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