Stage 1 ABC at a College: Assigning Costs to Activities An accounting professor

Question

Stage 1 ABC at a College: Assigning Costs to Activities
An accounting professor at Middleton University devotes 60 percent of her time to teaching, 30 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 financial accounting course (with a maximum enrollment of 40 students) and one section of a graduate financial accounting course (with a maximum enrollment of 25 students). Including course preparation, classroom instruction, and appointments with students, each course requires an equal amount of time. The accounting professor is paid $84,000 per year.

Determine the activity cost of instruction per student in both the introductory and the graduate financial accounting courses.

Round answers to two decimal places.

Incorrect

Incorrect

Explanation / Answer

Activity cost of instruction per student Cost allocated to Teaching (84000X60%) 50400 Time Spent Cost allocation Number of Students Cost of Instruction per Student Introductory Course 50% 25200 40 630.00 Graduate Course 50% 25200 25 1008.00 Total 50400 65 Cost of Instruction per Student = Cost allocated/ Number of Students

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