Question

Troglodyte University uses activity-based costing to assign indirect costs to academic departments, using three activities. The activity base, budgeted activity cost, and estimated activity-base usage for each activity are identified as follows: Activity Activity Base Budgeted Activity Cost Activity-Base Usage Facilities Square feet $800,000 80,000 square feet Instruction Number of course sections 1,200,000 600 sections Student services Number of students 290,000 2,500 students The activity-base usage associated with the Archaeology and Geology departments is as follows: Department Facilities Instruction Student Services Archaeology 8,000 square feet 8 sections 150 students Geology 5,200 square feet 15 sections 200 students a. Determine the activity rate for each activity. Activity Activity Rate Facilities $ per sq. ft. Instruction $ per section Student services $ per student b. Determine the total activity cost for the Archaeology Department. Total activity cost $

Answer 1

Answer:

USD 113 400 total

Explanation

I)

Rate of Activity:

actRate = actBudget/actBase

instruction = USD 1 200 000/600 Sections .= USD 2000/section

facilites = USD 800000/80000 Sq.Ft = USD 10/sq.ft)

student services = USD 290 000/2500 Students = USD 116/student

II)

Total = student services (150 students x USD 116/student) + Instruction (8 sections x USD 2000/section) + Facilities (8000SqFt x USD 10/sq.ft) +=

80 000 + 16 000 + 17 400 = USD 113 400