Kolbec Community College (KCC) has 4,000 full-time students and offers a varlety of academic programs in three areas: professional studies, arts, and technology. The professional studies programs prepare students for admtnistrative and clenical jobs in a varlety 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 varled, 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 deivering the varlous 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 full-time students: It is very important to understand the overhead costs consumed by each ocademic program at KCC in determining the full cost of operating the programs. Central administration af KCC allocates financial resources to acodemic programs based on the estimated full cost per student of delivening the program. The overhead costs at KCC are significant, totalting over 60% of direct costs Total annual overhead costs of KCC are as follows 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 deliverting the program The overhead costs at KCC are significant, totalling over 60% of direct costs. Total annual overhead costs at KCC are as follows: Traditionally. KCC has allocated overhead costs to academic programs on the basis of the number of full-time students in each program. This approoch was deemed approprlate since Jones reasoned that increasing the number of students at KCC would result in higher overhead costs (e. 9 , more facilites 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 approoch. 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 oble 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 activites than others, this could have a significant impact on the overhead costs assigned to each under the ABC approach Upon retuming to KCC, Jones decides to implement ABC. She, along vath Assistant CFO James West, begins by identying the key activities used to support the teaching programs. Rather than getting too detalied with respect to identifyling activities in the initial Implementation, Jones decides to keep the process manageable and comes up with slx key activities. Next. based on a sertes of interviews with various KCC employees who work in the departments covered by the identf ed activities, Jones and West estimate the percentage of the total administrative, facility. and office expense tesources consumed by each activity. Again, to keep the process efficlent. Jones rounds af percentages to the nearest 5%, fiquring thot a "close enough" opproach will surfice for this initual 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 actuvity measures and the specific quantities for each academic program: 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, compiete the following requirements: 0. Complete the first-stage allocation of overhead costs to academic prograrns b. Calculate the activity rates for each of the activity cost pools. (Round your enswers to 3 decimal pieces.) c. Using the activity rates calculated in (b), complete the second-stage allocation of overhead to academic programs. 3. Based on the results of (21). calculate the total cost per student (direct costs plus overheac) of operating each academic program. (Round your answers to 2 decimal places.)