7-45 Comprehensive Budgeting for a University Suppose you are the controller of Nebraska State University. The university president, Lisa Larsson is preparing for her annual fund-raising campaign for 20X7-20X8. 10 set an appropriate target, hi has asked you to prepare a budget for the academic year. You have collected the following data for the current year (20X6-20X7): Undergraduate Division Graduate Division Average salary of faculty member $58,000 $58,000 Average faculty teaching load in semester credit-hours per year 24 18 (eight undergraduate or six graduate courses) Average number of students per class 30 20 Total enrollment (full-time and part-time students) 3,600 1,800 Average number of semester credit-hours carried each year per student 25 20 Full-time load, semester hours per year 30 24CHAPTER 7 . INTRODUCTION TO BUDGETS AND PREPARING THE MAST For 20X7-20X8, all faculty and staff will receive a 6% salary increase. Undergraduate enrollment is expected to decline by 2%, but graduate enrollment is expected to increase by 5%. . The 20X6-20X7 budget for operation and maintenance of facilities was $500,000, which includes $240,000 for salaries and wages. Experience so far this year indicates that the budget is accurate. Salaries and wages will increase by 6% and other operating costs will increase by $12,000 in 20X7-20X8. . The 20X6-20X7 and 20X7-20X8 budgets for the remaining expenditures are as follows: 20X6-20X7 General administrative 20X7-20X8 $500,000 Library $525,000 Acquisitions 150,000 Operations 155,000 190,000 200,000 Health services 48,000 50,000 Intramural athletics 56,000 60,000 Intercollegiate athletics bebop 240,000 245,000 Insurance and retirement oenoopen an ting innewe 520,000 560,000 Interest 75,000 75,000 . Tuition is $92 per credit hour. In addition, the state legislature provides $780 per full-time- equivalent student. (A full-time equivalent is 30 undergraduate hours or 24 graduate hours.) Full-tuition scholarships are given to 30 full-time undergraduates and 50 full-time graduate students. Revenues other than tuition and the legislative apportionment are as follows: 20X6-20X7 20X7-20X8 Endowment income $200,000 $210,000 Net income from auxiliary services 325,000 335,000 Intercollegiate athletic receipts 290,000 300,000 . The chemistry/physics classroom building needs remodeling during the 20X7-20X8 period. Projected cost is $575,000. 1. Prepare a schedule for 20X7-20X8 that shows, by division, (a) expected enrollment, (b) total credit hours, (c) full-time-equivalent enrollment, and (d) number of faculty members needed, 2. Calculate the budget for faculty salaries for 20X7-20X8 by division. 3. Calculate the budget for tuition revenue and legislative apportionment for 20X7-20X8 by division. *. Prepare a schedule for President Larsson showing the amount that must be raised by the annual fund-raising campaign.A B C D E F G H Problem 7-45 Name WN Section A B C D E F G H 5 Data for 20X6-20X7 Nebraska State University 6 Undergraduates Graduates 7 Average salary of faculty member $ 58,000 $ 58,000 8 Average faculty teaching load in semester 9 credit-hours per year (eight undergraduate 10 or six graduate courses) 24 18 11 Average number of students per class 30 20 12 Total enrollment (full-time and part-time students) 3,600 1,800 13 Average number of semester credit-hours carried 14 each year per student 25 20 15 15 Full-time load, semester hours per year 30 24 16 Tuition per credit hour (no other fees required) $ 92 92 17 Data for 20X7-20X8 and additional information: 18 18 Enrollment increase (decrease) 2.00% 5.00% 19 19 Faculty salary increase 6.00% 6.00% 20 20 Full-time scholarships 30 50 21 21 Expenses: 20X7-20X8 22 22 Budget for operations & maintenance $ 526,400 23 23 Budget for remaining expenses 1,870,000 24 24 Budgeted operating expenses 2,396,400 25 25 Revenues: 26 26 Endowment income 210,000 27 27 Net income from auxiliary service 335,000 28 28 Intercollegiate athletic receipts 300,000 29 29 Other: 30 30 Classroom remodeling 575,000 31 31 Required: Undergraduates Graduates 32 32 a. Projected enrollment 3,528 1,890 33 33 b. Projected student credit hours 88,200 37,800 34 34 Less scholarship credit hours Formula 3 Formula 15 35 35 Tuition paying credit hours Formula 4 Formula 16 36 36 c. Full-time equivalent enrollment 2,940 1,575 37 37 Projected credit hours taught per faculty member 24 18 38 38 d. Projected number of full-time faculty 192.0 108.0 39 39 e. Projected salaries and benefits for full-time 40 40 faculty $ 668,160 $ 375.840 41 41 f. Projected tuition revenue Formula 9 Formula 21 42 42 Legislative apportionment: 43 43 Full-time equivalent students Formula 10 Formula 22 44 44 Legislative apportionment per full-time 45 45 equivalent student Formula 11 Formula 23 46 46 g. Total legislative apportionment Formula 12 Formula 24 47 47 48 18 Nebraska State University 49 49 Expenses: 20X7-20X8 50 50 Faculty salaries Formula 25 51 51 Budgeted operating expenses Formula 26 52 52 Total budgeted operating expenses 53 53 Revenues: 54 54 Tuition Formula 27 55 55 Legislative apportionment Formula 28 56 56 Endowment income Formula 29 57 57 Net income from auxiliary services Formula 30 58 58 Intercollegiate athletic receipts Formula 31 59 59 Total budgeted operating revenues $ 60 60 Deficit from operations Formula 32 61 61 Budgeted capital expenditures Formula 33 62 62 Total cash needed from fund-raising $ 63 63 64 64