Assignment Questions. Diagram the existing cost system used at AHU to assign costs to SB and SE in Clearly identify the allocation bases as well as the rates used to assign these costs. Is it an ABC system? Why? Exhibit 3: Budgeted and Actual Direct Labor Usage in 2020BudgetedHourlyActualHourlyWageDL DollarsWageDL DollarsSB8002,000,0007502,250,000SE2001,000,000150750,000Total3,000,0004,000,000Exhibit 4: 2021 Budget AssumptionsRevenues33,000,000Total enrollment750Total direct labor cost5,000,000Number of courses250Total research lab square footageTotal # of hours spent developing courses400,000200,000 Exhibit 1: 2020 Budgeted Operating Income StatementRevenues30,000,000CostsDirect Labor3,000,000Direct Facility2,000,000Administrative5,000,000Research podsInstructional design10,000,0007,500,000Operating Profit2,500,000Exhibit 2: Projected Operating Data for 2020SBSENumber of courses15050Research lab square footage100,000300,000Enrollment400200# of hours spent developing courses50,000200,000

Allocation bases or cost drivers can be identified as follows:

Exhibit 3: Budgeted and Actual Direct Labor Usage in 2020 Budgeted Hourly Wage Actual Hourly Wage 750 DL Dollars DL Dollars SB 800 2,000,000 2,250,000 SE 200 1,000,000 150 750,000 Total 3,000,000 4,000,000 Exhibit 4: 2021 Budget Assumptions Revenues 33,000,000 Total enrollment 750 Total direct labor cost 5,000,000 Number of courses Total research lab square footage Total # of hours spent developing courses 250 400,000 200,000

Exhibit 3: Budgeted and Actual Direct Labor Usage in 2020 Budgeted Hourly Wage Actual Hourly Wage 750 DL Dollars DL Dollars SB 800 2,000,000 2,250,000 SE 200 1,000,000 150 750,000 Total 3,000,000 4,000,000 Exhibit 4: 2021 Budget Assumptions Revenues 33,000,000 Total enrollment 750 Total direct labor cost 5,000,000 Number of courses Total research lab square footage Total # of hours spent developing courses 250 400,000 200,000

Quickbooks Online Accounting

3rd Edition

ISBN:9780357391693

Author:Owen

Publisher:Owen

Chapter8: Budgets And Bank Reconciliations

Section: Chapter Questions

Problem 3.3C

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