Tryst University Offers Only High-Tech Graduate-Level Programs

question 135

Essay

Tryst University offers only high-tech graduate-level programs. Tryst has two principal operating departments, Engineering and Social Sciences, and two support departments, Facility and Technology Maintenance and Enrollment Services. The base used to allocate facility and technology maintenance is budgeted total maintenance hours. The base used to allocate enrollment services is number of credit hours for a department. The Facility and Technology Maintenance budget is $450,000, while the Enrollment Services budget is $900,000. The following chart summarizes budgeted amounts and allocation-base amounts used by each department:

Required:
Use the direct method to allocate support costs to each of the two principal operating departments, Engineering and Social Sciences. Prepare a schedule showing the support costs allocated to each department.

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Definitions:

Quick Ratio

A liquidity metric that indicates a company's ability to cover its current liabilities without selling inventory, calculated as (cash plus marketable securities plus accounts receivable) divided by current liabilities.

Temporary Investments

Short-term investments that a company plans to convert into cash within a short period, typically one year or less.

Remote Contingent Liability

A potential financial obligation that is considered to be unlikely to occur; it is noted in financial statements as a footnote to provide full disclosure.

Accrual

A method of accounting that recognizes revenue and expenses when they are incurred, regardless of when cash transactions occur.