State University, a Very Large Public University, Has a Policy

question 65

Multiple Choice

State University, a very large public university, has a policy of granting faculty members a one-year sabbatical leave after a period of seven years of continuous employment.The leave is to be used for further study, research, or service.During the fiscal year ended 6/30/15, the university paid $3 million to faculty members on sabbatical leave and estimated that faculty members currently not on sabbatical leave earned $3.5 million toward sabbatical leaves they are likely to take in the future.The amount of sabbatical expenditures for the year ended 6/30/15 should be

• A)$0 million.
• B)$3 million.
• C)$3.5 million.
• D)$6.5 million.

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Definitions:

Actual

Pertaining to the real, recorded, or true values or outcomes, as opposed to estimated, planned, or theoretical figures.

Expected

Referring to what is considered likely or anticipated in terms of events, values, or outcomes.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit of a product.

Unit Sales

The total quantity of a product sold by a company, not accounting for the revenue generated or any discounts offered.