Burgess Business School has two degree programs, BBA and MBA. The school uses an ABC system to cost the three support services it provides to students from both programs: Career Center, Events, and Library. Following are the costs of these three activities and the cost drivers used in the system:

For the most recent year, data collected from the central IT systems indicate the following: 

Required

a. Compute the cost-driver rates for the three activities at the school.

b. Suppose that in a future period, no students from the MBA program visited the Library. What amount of the Library cost would be assigned to the MBA program?

c. Does the result in requirement (b) appear to reflect the resource usage at the school? Explain.

Transcribed Image Text:

Activity Career Center .... Event planning and hosting. Library....... Activity Cost Cost Driver $468,000 Interview-hours 630,000 Event attendance 561,000 Number of visits