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The library at Pacific Business School (PBS) serves both undergraduate and graduate programs. The dean of PBS Is Interested in evaluating the profitability of the
The library at Pacific Business School (PBS) serves both undergraduate and graduate programs. The dean of PBS Is Interested in evaluating the profitability of the degree programs and has asked the head of the library, Rex Gilmore, to allocate the annual library cost of $1,982,000 to the two programs. Rex believes that two cost drivers explain most of the costs: number of students and credit hours. Using Information from a previous analysis, he split the annual library budget as follows: Costs driven by number of students Library management Acquisitions Costs driven by number of credit hours Computer support Building maintenance Library staff Utilities and supplies Total library costs $ 497,000 617,000 $ 1,114,000 $ 67,000 241,000 391,000 169,000 $ 868,000 $1,982,000 Data on students and credit hours Undergraduate Number of students Number of credit hours 688 8,970 Graduate 912 30,030 Required: a. Allocate the cost of the library to the two programs (undergraduate and graduate). Number of students Percentage (%) Credit hours Percentage (%) Allocation of student-related costs Allocation of credit-hour costs Total allocations Undergraduate Graduate Total 0 0 0 0 S 0 0 $ 0 $ 0 $ 0
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