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. STATE UNIVERSITY BUSINESS SCHOOL, BBA DEGREE Degree Income Statemert For the Academic Year Ending June 30 Revenue 485,000 Advertising BBA program Faculty salaries Degree operating costs (part-time sta Building maintenance Classroom costs (building depreciation) Allocated school administration costs 18,000 240,000 28.500 39,000 125,000 43.600 Total costs Net loss Required a. Using the worksheet below, determine which revenues and costs are probably differential for the decision to drop the BBA program. BBA Degree Income Statement Differential Revenues and Costs For the Academic Year Ending June 30 $ 485.000 Costs 18.000 240.000 28.500 39.000 125,000 Faouity salaries Degree operating costs Classroom costs Total costs 450.500 dferential gain from BBA b. What will be the net effect on the SUBS contribution (profit) if the BBA program is dropped