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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Subject :- Accounting

Transcribed Image Text:The Norfolk School of Commerce (NSC) operates a Career Counseling Center (CCC) to advise students and help with job placement.
The CCC is available for both undergraduate and graduate degree students. The CFO at NSC wants better cost information about the
non-instructional activities of the School to be able to advise the dean on managing costs. The CFO asks the head of the CCC to
recommend an allocation of the annual cost of the Center to the two degree programs.
The CCC head, who has headed the Center for ten years, believes that two factors explain most of the costs-enrollment (number of
students) and usage (number of hours using the center for both counseling and interviews). Using information from a previous analysis,
the Center budget was separated as follows:
Costs driven by enrollment:
Center management
Company visits and support
Costs driven by usage:
Center staff
Facility maintenance
IT support
Utilities and supplies
Total CCC costs
Data on enrollment and usage:
Enrollment (students)
Usage (hours)
$ 996,000
1,293, 200
$ 2,289, 200
Allocation of enrollment-related costs
Allocation of usage-related costs
Total allocations
$ 773,000
503,000
179,000
359,000
$ 1,814,000
$ 4,103, 200
Undergraduate
945
9,506
Required:
a. llocate the cost of the library to the two programs (undergraduate and graduate).
Undergraduate
Graduate
315
17,654
Graduate
Total

Transcribed Image Text:Which of the following statements regarding special orders is true?
Multiple Choice
The primary decision for special orders is determining whether the differential revenue is greater than the differential costs associated with the order.
The differential analysis approach to pricing for special orders could lead to overpricing in the long run because fixed costs are included in the analysis.
Special orders are usually long-term commitments that impact other sales.
Special orders are usually short-run occurrences and must include full product costs in the analysis.
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