QUESTION 2:

University AAA is organized into four colleges with the following characteristics:

Business Engineering Science Humanities

Number of majors10,0009,0009,6002,400

Number of non-majors taking classes2,00010004,8007,200

Revenue from student fees$1,200,000 $1,000,000 $1,440,000 $960,000

Revenue from external grants$400,000 $3,000,000 $1,600,000 $240,000

Variable cost per student$35.00$65.00$80.00 $25.00

Fixed cost per student (based on total students) $35.00 $65.00$25.00$10.00

A.List three items that would likely be included in the category of variable costs per student from the perspective of each college.

B.List two items that would likely be included as fixed costs per student from the perspective of each college.

C.Calculate the contribution margin per student from the perspective of each college and then from the perspective of the university as a whole.

D.Calculate the total profit from the perspective of each college and then for the university as a whole.

E.Based on financial considerations alone, identify the college that would be most likely to be dropped from the university during a budget crisis.Then identify the candidate that would least likely be dropped.

QUESTION3:

Abdullah and Rahman Corporation produces and sells two types of sofa pillow: Plain and fancy. Currently, Abdullah and Rahman uses a traditional costing system with direct labor hours as the allocation base. Actual hours for 20X3 were 20,000. In anticipation of developing an activity-based costing system, Abdullah and Rahman has identified the following cost pools and activities associated with pillow production:

Estimated CostsActual Costs

for 20x4for 20x3

ActivityDriver

Material cuttingNumber of cuts$32,000 $27,330

Sewing machine setups Number of setups54,000 49,600

Factory maintenanceNumber of direct labor hours 30,000 34,000

$116,000 $110,930

Direct costs for a plain sofa pillow are $1.25 for material and $2.00 for direct labor (15 minutes @ $8.00 per hour).Direct costs for a fancy sofa pillow are $1.50 for material and $4.00 (30 minutes @ $8.00 per hour).In 20x4, BCH expects to make 8,000 fancy pillows and 10,000 plain pillows.Those output levels will require 5 setups for fancy pillows and 10 setups for plain pillows.For the material cutting activity, the number of cuts is estimated at 10,000 for each type of pillow.

What will be the cost per unit for each type of pillow under traditional costing?

QUESTION 4:

Describe quantitative and qualitative approaches/ informations, and explain why both are important in management decision making.