Case 5 21
Group Assignment #1
Group 11
Runcheng Zhang, Blair Macaulay
October 13th 2014
ACC-1100-D01
Debbie Mortimer
*Note: The other two group members did not contribute to this assignment
1a) Predetermined overhead rate.
b) Overhead costs per program base on predetermined rate
c) Total cost per student of each academic program
2a) First stage allocation of overhead costs
b) Activity rates
c) Second stage allocation of overhead
Professional
Arts
Technology
3. Total cost per student of each academic program
Q4.
Memorandum
To: Lynn Jones, CFO
From: Group 11
Date: Monday October 13th 2014
Subject: Traditional and activity based costing
Based on analysis of the traditional costing method and the activity based costing method, we have discovered some trends amongst the three department at Kolbec Community College that are worth noting.
It is clear that the traditional and ABC costs per student are vastly different. This difference is extremely evident in the professional studies in particular where costs per student are lower than the other two programs of studies based on the ABC method. The traditional costing does not pick up on the difference in overhead costs per student like that the ABC costing does due to a predetermined overhead rate. Traditional costing method makes it seem like all costs per student are the same which would indicate higher total costs for professional studies due to higher enrollment. The ABC method shows that the professional studies program is much more efficient at keeping the costs per student down. The difference in overhead cost per student based on the ABC method could indicate that the arts and technology programs can learn something from professional studies on how to keep costs down. This may have something to do with the economies of scale (since professional has as many students as art and technology combined).
Sincerely,
Group 11
Group 11
Runcheng Zhang, Blair Macaulay
October 13th 2014
ACC-1100-D01
Debbie Mortimer
*Note: The other two group members did not contribute to this assignment
1a) Predetermined overhead rate.
b) Overhead costs per program base on predetermined rate
c) Total cost per student of each academic program
2a) First stage allocation of overhead costs
b) Activity rates
c) Second stage allocation of overhead
Professional
Arts
Technology
3. Total cost per student of each academic program
Q4.
Memorandum
To: Lynn Jones, CFO
From: Group 11
Date: Monday October 13th 2014
Subject: Traditional and activity based costing
Based on analysis of the traditional costing method and the activity based costing method, we have discovered some trends amongst the three department at Kolbec Community College that are worth noting.
It is clear that the traditional and ABC costs per student are vastly different. This difference is extremely evident in the professional studies in particular where costs per student are lower than the other two programs of studies based on the ABC method. The traditional costing does not pick up on the difference in overhead costs per student like that the ABC costing does due to a predetermined overhead rate. Traditional costing method makes it seem like all costs per student are the same which would indicate higher total costs for professional studies due to higher enrollment. The ABC method shows that the professional studies program is much more efficient at keeping the costs per student down. The difference in overhead cost per student based on the ABC method could indicate that the arts and technology programs can learn something from professional studies on how to keep costs down. This may have something to do with the economies of scale (since professional has as many students as art and technology combined).
Sincerely,
Group 11