The College of Business Administration Needs to Distribute $12,000 Received

question 79

Essay

The College of Business Administration needs to distribute $12,000 received from an anonymous donor and earmarked for three business student organizations,Beta Alpha Psi (BAP),Delta Sigma Pi (DSP),and Beta Gamma Sigma (BGS).Relevant information is provided below: $\begin{array}{|l|r|l|r|}\hline \text { Possible Cost Driver } & \text { BAP } & \text { DSP } & \text { BGS } \\\hline \text { Number of students } & 30 & 40 & 100 \\\hline \text { Budgeted expenses } & \$ 5,500 & \$ 4,000 & \$ 500 \\\hline \begin{array}{l}\text { Number of } \\\text { organizations }\end{array} & 1 & 1 & 1 \\\hline\end{array}$ Assume that each organization wishes to obtain the highest funding possible.
Required:
1)Which cost driver will each organization recommend be used to distribute the funds?
2)Which cost driver would you recommend and why?

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Definitions:

Comparative Advantage

The ability of a country to produce a specific good or service at a lower opportunity cost than a rival.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen.

Rival Nation

A country that competes with another, often in economic, military, or technological aspects.

Mercantilism

An economic theory and practice that promotes government regulation of the nation's economy to increase state power at the expense of rival national powers.