Professor John Morton has just been appointed chairperson of the Finance Department at Westland University. In reviewing the department's cost records, Professor Morton has found the following total cost associated with Finance 101 over the last five terms: Term Fall, last year Winter, last year Summer, last year Fall, this year Winter, this year Number of Sections Offered Total Cost 4 6 2 5 3 $ 10,000 $ 14,000 $ 7,000 $ 13,000 $ 9,500 Professor Morton knows that there are some variable costs, such as amounts paid to graduate assistants, associated with the course. He would like to have the variable and fixed costs separated for planning purposes. 3-a. Assume that because of the small number of sections offered during the Winter Term this year, Professor Morton will have to offer eight sections of Finance 101 during the Fall Term. Compute the expected total cost for Finance 101. 3-b. Can you see any problem with using the cost formula from (2) above to derive this total cost figure?
Professor John Morton has just been appointed chairperson of the Finance Department at Westland University. In reviewing the department's cost records, Professor Morton has found the following total cost associated with Finance 101 over the last five terms: Term Fall, last year Winter, last year Summer, last year Fall, this year Winter, this year Number of Sections Offered Total Cost 4 6 2 5 3 $ 10,000 $ 14,000 $ 7,000 $ 13,000 $ 9,500 Professor Morton knows that there are some variable costs, such as amounts paid to graduate assistants, associated with the course. He would like to have the variable and fixed costs separated for planning purposes. 3-a. Assume that because of the small number of sections offered during the Winter Term this year, Professor Morton will have to offer eight sections of Finance 101 during the Fall Term. Compute the expected total cost for Finance 101. 3-b. Can you see any problem with using the cost formula from (2) above to derive this total cost figure?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter14: Quality And Environmental Cost Management
Section: Chapter Questions
Problem 21E: At the end of 20x5, Bing Pharmaceuticals began to implement an environmental quality management...
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