{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-05-22T12:12:07-04:00", "answer_date": "2024-05-22 12:12:07", "is_docs_available": "", "is_excel_available": "", "is_pdf_available": "", "count_file_available": 0, "main_page": "student_question_view", "question_id": "1511658", "url": "\/study-help\/questions\/abc-group-assignment-kolbec-community-college-kcc-has-4000-fulltime-1511658", "question_creation_date_js": "2024-05-22T12:12:07-04:00", "question_creation_date": "May 22, 2024 12:12 PM", "meta_title": "[Solved] ABC Group Assignment Kolbec Community Col | SolutionInn", "meta_description": "Answer of - ABC Group Assignment Kolbec Community College (KCC) has 4,000 full-time students and offers a variety of academic prog | SolutionInn", "meta_keywords": "abc,group,assignment,kolbec,community,college,kcc,4,000,full-time,students,offers,variety", "question_title_h1": " ABC Group Assignment Kolbec Community College (KCC) has 4,000 full-time students and offers a variety of academic programs in three areas: professional studies, arts,", "question_title": " ABC Group Assignment Kolbec Community College (KCC) has 4,000 full-time students", "question_title_for_js_snippet": "ABC Group Assignment Kolbec Community College (KCC) has 4,000 full time students and offers a variety of academic programs in three areas professional studies, arts, and technology The professional studies programs prepare students for administrative and clerical jobs in a variety of professional settings, including accounting, medicine, and law The arts program's offerings are wide ranging and include graphic design, digital animation, culinary arts, cosmetology, and music arts The technology programs are also varied, including information technology, medical laboratory technology, electrical engineering technology, pharmacy technology, and natural resources technology The chief financial officer of KCC, Lynn Jones, has consistently emphasized to other members of the senior management team the importance of understanding the costs of delivering the various academic programs To that end, the costing system used at KCC tracks the direct costs of each program, which are shown below on an annual basis, along with the number of fulltime students Item Full Time Students Professor's salaries Administrative salaries Supplies Teaching support Facilities Total direct cost Professional Studies 2,000 $ 1,290,000 $ 111,000 46,000 166,000 287,000 Arts Technology 1,000 1,000 Total 4,000 662,000 $ 792,000 $2,744,000 73,000 73,000 257,000 156,000 53,000 255,000 103,000 86,000 355,000 156,000 181,000 624,000 $ 1,900,000 $1,150,000 $1,185,000 $ 4,235,000 It is very important to understand the overhead costs consumed by each academic program at KCC in determining the full cost of operating the programs Central administration at KCC allocates financial resources to academic programs based on the estimated full cost per student of delivering the program The overhead costs at KCC are significant, totalling over 60 of direct costs Total annual overhead costs at KCC are as follows Cost Administrative salaries 930,000 Facility costs 1,340,000 Office expenses 310,000 Total overhead costs $ 2,580,000 Traditionally, KCC has allocated overhead costs to academic programs on the basis of the number of Fulltime students in each program This approach was deemed appropriate since Jones reasoned that increasing the number of students at KCC would result in higher overhead costs (e g , more facilities would be needed, more indirect support costs would be incurred, etc ) However, Jones is beginning to question the accuracy of the traditional approach since it results in a similar full cost per student for the arts and technology programs, which she feels doesn't make sense Based on her knowledge of the programs, Jones feels that the technology program is probably more expensive to deliver than the arts program, but this does not come through in the traditional costing approach Jones recently attended a seminar on management techniques being used by leading educational institutions that, among other topics, covered the basics of the ABC approach She likes the idea of being able to assign indirect costs to academic programs on the basis of how much of the support activity resources are consumed by each program If Jones's instincts are correct in that some programs consume more resources of certain activities than others, this could have a significant impact on the overhead costs assigned to each under the ABC approach Upon returning to KCC, Jones decides to implement ABC She, along with Assistant CFO James West, begins by identifying the key activities used to support the teaching programs Rather than getting too detailed with respect to identifying activities in the initial implementation, Jones decides to keep the process manageable and comes up with six key activities Next, based on a series of interviews with various KCC employees who work in the departments covered by the identified activities, Jones and West estimate the percentage of the total administrative, facility, and office expense resources consumed by each activity Again, to keep the process efficient, Jones rounds all percentages to the nearest 5 , figuring that a close enough approach will suffice for this initial implementation and recognizing that the estimates are subjective to begin with The results are shown below Activity Central administration Informaiton systems technology Student counselling services Human resources Library operations Registrar's office Total Resource Distribution across Activities Administrative Facilities Office 20 5 20 20 15 20 5 5 5 10 5 5 20 65 35 25 5 15 100 100 100 Working with key personnel from each of the six activities shown above, Jones and West then identify the activity measure and the quantity of that measure used for each teaching program Fortunately KCC implemented an enterprise resource planning system a few years ago, which is already tracking much of the information needed regarding the activity measures and the specific quantities for each academic program Activity Central administration Information systems technology Student counselling services Human resources Library operations Registrar's office Measure Professional Arts Technology Hours spent on program Processing hours 6,000 7,000 7,000 5,800 2,700 11,500 Number of students counselled 144 92 164 Number of admin Staff faculty members Number of library circulations Fulltime students 21 15 14 7,000 3,500 3,500 2,000 1,000 1,000 Required 1 Using the traditional approach to assigning overhead costs to academic programs a Calculate the predetermined overhead rate b Assign the overhead costs to each academic program using the predetermined rate c Calculate the total cost per student (direct costs plus overhead) of operating each academic program 2 Using ABC complete the following requirements a Complete the first stage allocation of overhead costs to academic programs, using Exhibit 7 7as a guide b Calculate the activity rates for each of the activity cost pools, using Exhibit 7 8 as a guide (Round your answers to 2 decimal places ) c Using the activity rates calculated in (b), complete the second stage allocation of overhead to academic programs 3 Based on the results of (2), calculate the total cost per student (direct costs plus overhead) of operating each academic program (Round your answers to 2 decimal places ) Team Req 1 1 a Team Members Participated Using the trditional approach to assigning overhead costs to academic programs Predetermined overhead rate Total overhead costs Full time students per student 1 b Overhead costs assigned to academic programs Professional studies OH rate x of stu Arts Technology 1 c Total cost per student Professional Studies Arts Technology Total Professors' salaries $ 0 Administrative salaries 0 Supplies 0 Teaching support 0 Facilities 0 Overhead 0 Total costs $ 0 $ 0 SO $ 0 Full time students Cost per student Team Members Participated Using ABC, complete the following requirements Complete the first stage allocation of overhead costs to academic programs Administrative Facilities Office Total cost Central Admin SO Info Systems Student Counseling SO Human Resources Library Operations Registrar's Office $ 0 Caculate the activity rates for each of the activity cost pools (Round your answers to 2 decimal places ) SO $ 0 Activity Cost Pool Central administration Information systems technology Student counselling services Human resources Library operations Registrar's office Total Cost Total Activity Activity Rate Program hours Processing hours Stu counselled of faculty staff Circulations Full time students Using the activity rates calculated in (b), compute the second stage allocation of overhead to academic programs Activity Cost Pool Central administration Information systems technology Student counselling services Human resources Library operations Registrar's office Total Professional Studies Arts Technology $ 0 $ 0 $ 0 per hour per hour per student member circulation student Team Req 3 Team Members Participated Based on the results of (2), calculate the total cost per student (direct costs plus overhead) of operating each academic programs (Round your answers to 2 decimal places) Professors' salaries Administrative salaries Supplies Teaching support Facilities Overhead Total costs Full time students Cost per student Professional Studies Arts Technology Total $ 0 0 0 0 0 0 SO SO SO $ 0", "question_description": "\"image\"image\"image\"image\"image\"image", "transcribed_text": "ABC Group Assignment Kolbec Community College (KCC) has 4,000 full-time students and offers a variety of academic programs in three areas: professional studies, arts, and technology. The professional studies programs prepare students for administrative and clerical jobs in a variety of professional settings, including accounting, medicine, and law. The arts program's offerings are wide ranging and include graphic design, digital animation, culinary arts, cosmetology, and music arts. The technology programs are also varied, including information technology, medical laboratory technology, electrical engineering technology, pharmacy technology, and natural resources technology. The chief financial officer of KCC, Lynn Jones, has consistently emphasized to other members of the senior management team the importance of understanding the costs of delivering the various academic programs. To that end, the costing system used at KCC tracks the direct costs of each program, which are shown below on an annual basis, along with the number of fulltime students: Item Full-Time Students Professor's salaries Administrative salaries Supplies Teaching support Facilities Total direct cost Professional Studies 2,000 $ 1,290,000 $ 111,000 46,000 166,000 287,000 Arts Technology 1,000 1,000 Total 4,000 662,000 $ 792,000 $2,744,000 73,000 73,000 257,000 156,000 53,000 255,000 103,000 86,000 355,000 156,000 181,000 624,000 $ 1,900,000 $1,150,000 $1,185,000 $ 4,235,000 It is very important to understand the overhead costs consumed by each academic program at KCC in determining the full cost of operating the programs. Central administration at KCC allocates financial resources to academic programs based on the estimated full cost per student of delivering the program. The overhead costs at KCC are significant, totalling over 60% of direct costs. Total annual overhead costs at KCC are as follows: Cost Administrative salaries 930,000 Facility costs 1,340,000 Office expenses 310,000 Total overhead costs $ 2,580,000 Traditionally, KCC has allocated overhead costs to academic programs on the basis of the number of Fulltime students in each program. This approach was deemed appropriate since Jones reasoned that increasing the number of students at KCC would result in higher overhead costs (e.g., more facilities would be needed, more indirect support costs would be incurred, etc.). However, Jones is beginning to question the accuracy of the traditional approach since it results in a similar full cost per student for the arts and technology programs, which she feels doesn't make sense. Based on her knowledge of the programs, Jones feels that the technology program is probably more expensive to deliver than the arts program, but this does not come through in the traditional costing approach. Jones recently attended a seminar on management techniques being used by leading educational institutions that, among other topics, covered the basics of the ABC approach. She likes the idea of being able to assign indirect costs to academic programs on the basis of how much of the support activity resources are consumed by each program. If Jones's instincts are correct in that some programs consume more resources of certain activities than others, this could have a significant impact on the overhead costs assigned to each under the ABC approach. Upon returning to KCC, Jones decides to implement ABC. She, along with Assistant CFO James West, begins by identifying the key activities used to support the teaching programs. Rather than getting too detailed with respect to identifying activities in the initial implementation, Jones decides to keep the process manageable and comes up with six key activities. Next, based on a series of interviews with various KCC employees who work in the departments covered by the identified activities, Jones and West estimate the percentage of the total administrative, facility, and office expense resources consumed by each activity. Again, to keep the process efficient, Jones rounds all percentages to the nearest 5%, figuring that a \"close enough\" approach will suffice for this initial implementation and recognizing that the estimates are subjective to begin with. The results are shown below: Activity Central administration Informaiton systems technology Student counselling services Human resources Library operations Registrar's office Total Resource Distribution across Activities Administrative Facilities Office 20% 5% 20% 20% 15% 20% 5% 5% 5% 10% 5% 5% 20% 65% 35% 25% 5% 15% 100% 100% 100% Working with key personnel from each of the six activities shown above, Jones and West then identify the activity measure and the quantity of that measure used for each teaching program. Fortunately. KCC implemented an enterprise resource planning system a few years ago, which is already tracking much of the information needed regarding the activity measures and the specific quantities for each academic program: Activity Central administration Information systems technology Student counselling services Human resources Library operations Registrar's office Measure Professional Arts Technology Hours spent on program Processing hours 6,000 7,000 7,000 5,800 2,700 11,500 Number of students counselled 144 92 164 Number of admin. Staff & faculty members Number of library circulations Fulltime students 21 15 14 7,000 3,500 3,500 2,000 1,000 1,000 Required 1. Using the traditional approach to assigning overhead costs to academic programs: a. Calculate the predetermined overhead rate. b. Assign the overhead costs to each academic program using the predetermined rate. c. Calculate the total cost per student (direct costs plus overhead) of operating each academic program. 2. Using ABC complete the following requirements: a. Complete the first-stage allocation of overhead costs to academic programs, using Exhibit 7-7as a guide. b. Calculate the activity rates for each of the activity cost pools, using Exhibit 7-8 as a guide. (Round your answers to 2 decimal places.) c. Using the activity rates calculated in (b), complete the second stage allocation of overhead to academic programs 3. Based on the results of (2), calculate the total cost per student (direct costs plus overhead) of operating each academic program. (Round your answers to 2 decimal places.) Team #: Req. 1: 1.a. Team Members Participated: Using the trditional approach to assigning overhead costs to academic programs: Predetermined overhead rate: Total overhead costs + Full-time students per student 1.b Overhead costs assigned to academic programs: Professional studies: OH rate x # of stu. Arts: Technology: 1.c Total cost per student: Professional Studies Arts Technology Total Professors' salaries $ 0 Administrative salaries 0 Supplies 0 Teaching support 0 Facilities 0 Overhead 0 Total costs $ 0 $ 0 SO $ 0 Full-time students Cost per student Team Members Participated: Using ABC, complete the following requirements: Complete the first-stage allocation of overhead costs to academic programs. Administrative Facilities Office Total cost Central Admin SO Info Systems Student Counseling SO Human Resources Library Operations Registrar's Office $ 0 Caculate the activity rates for each of the activity cost pools. (Round your answers to 2 decimal places.) SO $ 0 Activity Cost Pool Central administration Information systems technology Student counselling services Human resources Library operations Registrar's office Total Cost Total Activity Activity Rate Program hours Processing hours Stu. counselled # of faculty & staff Circulations Full-time students Using the activity rates calculated in (b), compute the second-stage allocation of overhead to academic programs: Activity Cost Pool Central administration Information systems technology Student counselling services Human resources Library operations Registrar's office Total Professional Studies Arts Technology $ 0 $ 0 $ 0 per hour per hour per student member circulation student Team #: Req. 3: Team Members Participated: Based on the results of (2), calculate the total cost per student (direct costs plus overhead) of operating each academic programs. (Round your answers to 2 decimal places) Professors' salaries Administrative salaries Supplies Teaching support Facilities Overhead Total costs Full-time students Cost per student Professional Studies Arts Technology Total $ 0 0 0 0 0 0 SO SO SO $ 0", "related_book": { "title": "Managerial Accounting", "isbn": "B010IKDQZM", "edition": "10th Edition", "authors": "Carl S. Warren, James M. Reeve, Jonathan E. Duchac", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/125.jpg", "uri": "\/textbooks\/managerial-accounting-10th-edition-b010ikdqzm", "see_more_uri": "\/textbooks\/business-auditing-financial-auditing-3474" }, "free_related_book": { "isbn": "3319663860", "uri": "\/textbooks\/designing-a-sustainable-financial-system-development-goals-and-socio-ecological-responsibility-1st-edition-978-3319663869-275331", "name": "Designing A Sustainable Financial System Development Goals And Socio Ecological Responsibility", "edition": "1st Edition" }, "question_posted": "2024-05-22 12:12:07", "see_more_questions_link": "\/study-help\/questions\/business-finance-2024-August-28", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/study-help\/questions\/2-consider-two-households-one-with-an-income-twice-as-701756", "description": "2. Consider two households, one with an income twice as large as the other. 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