State University Business School (SUBS) offers several degrees, including Bachelor of Business Administration (BBA). The new dean believes in using cost accounting information to make decisions and is reviewing a staff-developed income statement broken down by the degree offered. The dean is considering closing down the BBA program because the analysis, which follows, shows a loss. Tuition increases are not possible. The dean has asked for your advice. If the BBA degree program is dropped school administration costs are not expected to change, but direct costs of the program, such as operating costs, building maintenance, and classroom costs, would be saved. There will be no other changes in the operations or costs of other programs. 330,000 STATE UNIVERSITY BUSINESS SCHOOL, BBA DEGREE Degree Income Statement For the Academic Year Ending June 30 Revenue $ Costs Advertising A program Faculty salaries Degree operating costs (part-time staff) Building maintenance Classroom costs (building depreciation) Allocated school administration costs Total costs $ Net loss $ 23,000 150,000 24,500 27,000 55,000 10,000 338,500 (8,500) Required: a. Using the worksheet below, determine which revenues and costs are probably differential for the decision to drop the BBA program b. What will be the net effect on the SUBS contribution (profit) if the BBA program is dropped? Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Using the worksheet below, determine which revenues and costs are probably differential for the decision to drop the BBA program > STATE UNIVERSITY BUSINESS SCHOOL, BBA DEGREE Degree Income Statement Differential Revenues and Costs For the Academic Year Ending June 30 Revenue $ 330,000 Differential Costs Advertising - BBA program 23,000 Differential Faculty salaries 150,000 Differential Degree operating costs 24,500 Differential Building maintenance 27,000 Differential Classroom costs (55.000) Differential Allocated school administration costs 0 Not differential Total costs $ 169,500 Net differential gain from BBA program $ 160,500 00