Question

The University of Dental Health (UDH) is a state-run university focusing on the education and training of dentists, dental assistants, dental hygienists, and other dental professionals. The university provides both traditional undergraduate courses to 12,000 students and continuing professional education (CPE) courses to 8,000 practicing professionals. UDH has just hired a new controller who wants to utilize ABC. The controller has identified three key activities performed by the university and the cost of each of these activities: • UDH has 3 buildings with a total of 200,000 square feet of classroom and facility space. Due to the large space requirements for labs and other training facilities, the undergraduate program utilizes 170,000 square feet. Total cost $2,300,000 . UDH offers career placement services for undergraduate students, career counseling for active professionals taking CPE courses, and other student services to both groups. Total cost, $660,000. • UDH offers 1,200 different Instructional courses each year, 800 of which are undergraduate courses. Total cost $3,360,000. Required: 1. Compute an activity rate for each of the three activities identified by the controller. 2. Compute cost driver values and activity proportions for each group of students for each activity. 3. Determine the amount of costs assigned to each group of students and the cost per student to UDH to provide these three key activities. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Compute an activity rate for each of the three activities identified by the controllen (Round activity Rates to 2 decimal places.) Activity Activity Cost Driver Cost Total Activity Driver Activity Rate Facilities Square Feet 5 2.300.000 Services Number of Students 600,000 Instruction Number of Courses $ 3.380,000 Required 2 >

Answer 1

1.

Computation of activity rate for each of the three activities
Activity	activity cost driver	cost (a)	total activity driver (b)	activity rate (a)/(b)
facilities	square feet	$23,00,000.00	200000	$          11.50
services	no of students	$ 6,60,000.00	20000	$          33.00
instruction	no of courses	$33,60,000.00	1200	$     2,800.00

2.

Computation of cost driver values and activity proportions for each group of students
Activity	activity cost driver	cost	undergraduate	(1)activity proportion=undergraduate/total	CPE	(2)Activity proportion= CPE/total	total	total proportion (1)+(2)
Facilities	square feet	$23,00,000.00	170000	$            0.85	30000	$            0.15	200000	1
services	no of students	$ 6,60,000.00	12000	$            0.60	8000	$            0.40	20000	1
instruction	no of courses	$33,60,000.00	800	$            0.67	400	$            0.33	1200	1

3.

Determine the amount of costs assigned to each group of student
Activity	activity cost driver	cost	undergraduate = cost x activity portion in part 2	CPE= cost * activity portion in part 2	undergraduate = cost x activity portion in part 2	CPE= cost * activity portion in part 2
facilities	Square feet	2300000	1955000	345000	=2300000* 0.85	=2300000*0.15
services	no of students	660000	396000	264000	=660000*0.6	=660000*0.4
instruction	no of courses	3360000	22,51,200.00	1108800	=3360000*0.67	=3360000*0.33
total cost assigned (1)			4602200	1717800
no of students(2)			12000	8000
cost per students(1)/(2)			$         383.52	$        214.73