Exercise 12-31 Cost Allocation in a College (LO 12-4)

Lackawanna Community College has three divisions: Liberal Arts, Sciences, and Business Administration. The colleges comptroller is trying to decide how to allocate the costs of the Admissions Department, the Registrars Department, and the Computer Services Department. The comptroller has compiled the following data for the year just ended.

Department	Annual Cost
Admissions	$	134,000
Registrar		229,000
Computer Services		484,000

Division	Budgeted Enrollment			Budgeted Credit Hours			Planned Courses Requiring Computer Work
Liberal Arts		2,700			47,000			29
Sciences		1,650			40,750			41
Business Administration		1,550			34,750			41

Required: 1. Distribute the departmental costs to the colleges three divisions based on the allocation base given. 2. Choose the better allocation base for distributing the cost to the following departments: