Suppose you are the controller of Pierre Elliot Trudeau Memorial University. The university president is preparing for his annual fundraising campaign for 2010-2011. To set an appropriate target, he has asked you to prepare a budget for the academic year. You have collected the following data for the current year (2009 - 2010).

a) For 2010-2011, all faculty and staff will receive a 6 percent salary increase. Undergraduate enrolment is expected to decline by 2 percent, but graduate enrolment is expected to increase by 5 percent.

Undergraduate Graduate

Avg salary of faculty member 48,760 $ 48,760 $

Avg faculty teaching load in semester credit-hours per year (8 undergraduate or 6 graduate courses) 24 18

Avg number of students per class 30 20

Total enrolment (full-time and part-time students) 3,600 1,800

Avg number of semester credit hours carried each year per student 25 20

Full-time load, semester hours per year 30 24

b) The 2009-2010 budget for operation and maintenance of facilities is $500,000, which includes $240,000 for salaries and wages. Experience so far this year indicates that the budget is accurate. Salaries and wages will increase by 6 percent and other operating costs by $12,000 in 2010-2011.

c) The 2009-2010 and 2010-2011 budgets for the remaining expenditures are:

2009-2010 2010-2011

General administrative 500,000 $ 525,000 $

Library

Acquisitions 150,000 155,000

Operations 190,000 200,000

Health services 48,000 50,000

Intramural athletics 56,000 60,000

Intercollegiate athletics 240,000 245,000

Insurance and retirement 520,000 560,000

Interest 75,000 75,000

d) Tuition is $70 per credit-hour. In addition, the provincial government provides $780 per fulltime-equivalent student. (A full-time equivalent is 30 undergraduate semester credit-hours of 24 graduate semester credit-hours.) Tuition scholarships are given to 30 full-time undergraduates and 50 full-time graduate students.

e) Revenues other than tuition and the government apportionment are:

2009-2010 2010-2011

Endowment income 200,000 210,000

Net income from auxiliary services 325,000 335,000

Intercollegiate athletic receipts 290,000 300,000

f) The chemistry/physics classroom building needs remodelling during the 2010-2011 period. The projected cost is $550,000.

Required

1. Prepare a schedule for 2010-2011 that shows, by division, (a) expected enrolment, (b) total credit-hours, (c) full-time equivalent enrolment, and (d) number of faculty members needed. (8 marks)

2. Calculate the budget for faculty salaries for 2010-2011 by division. (2 marks)

3. Calculate the budget for tuition revenue and government apportionment for 2010-2011 by division. (7 marks)

4. Prepare a schedule for the president showing the amount that must be raised by the annual fundraising campaign. (8 marks)