Expenditures Teachers salaries and benefits 2400000 800000 320000 480000

Expenditures teachers salaries and benefits 2400000

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Expenditures Teachers’ salaries and benefits $2,400,000 $ 800,000 $ 320,000 $480,000 $4,000,000 Principals’ salaries and benefits 40,000 240,000 20,000 100,000 400,000 Facilities cost 910,000 390,000 1,170,000 130,000 2,600,000 Office staff salaries and benefits 15,000 180,000 30,000 75,000 300,000 Sports program staff salaries and benefits 175,000 50,000 225,000 50,000 500,000 Total $3,540,000 $1,660,000 $1,765,000 $835,000 $7,800,000 No. of students 500 500 500 500 500 Cost per student $7,080 $ 3,320 $3,530 $1,670 $15,600 Percent of total cost by activity 45% 21% 23% 11% 100%
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Academic instruction capacity 60 0 students Cost of academic instruction activity (from requirement 1 calculations) $3,540,00 0 Cost of academic instruction per student at full utilization = $3,540,000 ÷ 600 $ 5,900 Academic instruction resource costs used by current student population = 500 × $5,900 $2,950,000 Cost of excess academic instruction capacity = $3,540,000 – $2,950,000 $ 590,000 Most of the costs at Harmon school are fixed in the short-run. So, Smith must try to recruit more students to the school. If, in the long run, it seems like the student population is going to be stable at around 500, he should plan how some of the excess capacity can be cut back so that the fixed school capacity is better utilized, that is, he should work to reduce the cost of excess capacity. One problem with that plan is that “cutting excess academic instruction capacity” may eventually mean reducing the number of sections in each grade and letting teachers go, and if this involves the loss of experienced teachers, that could cause long-term damage to the school. Unrelated to the excess capacity issue, but with the aim of improving the school’s economics, he should consider doing away with expensive activities like the ice hockey program which raises the cost per student substantially, even after a large fee is charged from students who choose to play the sport. 5-10
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5-11
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5-26 (20 - 25 min.) Activity-based costing, job-costing system. 1. An overview of the activity-based job-costing system is: 2. Activity Area Indirect Manufacturing Costs Allocated 1. Axial insertion $ 0.08 × 45 = $ 3.60 2. Dip insertion 0.25 × 24 = 6.00 3. Manual insertion 0.50 × 11 = 5.50 4. Wave solder 3.50 × 1 = 3.50 5. Backload 0.70 × 6 = 4.20 6. Test 90.00 × .25 = 22.50 7. Defect analysis 80.00 × .10 = 8.00 Total $53.30 Direct manufacturing costs: Direct materials $75.00 Direct manufacturing labor 15 .00 $ 90.00 Indirect manufacturing costs: Manufacturing overhead (see above) 53.30 Total manufacturing costs $143.30 3. The manufacturing manager likely would find the ABC job-costing system useful in cost management. Unlike direct manufacturing labor costs, the seven indirect cost pools are systematically linked to the activity areas at the plant. The result is more accurate product costing. Productivity measures can be developed that directly link to the management accounting system. Marketing managers can use ABC information to price jobs as well as to advise customers about how selecting different product features will affect price. 5-12 POOL BASE Direct Materials INDIRECT COST COST ALLOCATION } } } } COST OBJECT: PC BOARD Indirect Costs Direct Costs Axial Insertion Number of Axial Insertions Dip Insertion Number of Dip Insertions Manual Insertion Number of Manual Insertions Wave Solder Number of Boards Soldered Backload Number of Backload Insertions Test Budgeted Time in Test Defect Analysis Budgeted
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