Paragon University Operates an Extensive and an Expensive Registration, Testing

question 159

Essay

Paragon University operates an extensive and an expensive registration, testing, and counselling centre, through which all students are required to pass through when they enter the university.The registration effort's costs (for the most part)are almost impossible to allocate based upon which students require time, effort, etc.The cost of this centre is approximately 15% of the total costs of Paragon.This department engages in no other activities than the registration of students.Paragon is interested in determining the profitability of the three technical departments it operates.Paragon has the perception that some departments are more profitable than others, and it would like to determine an appropriate method of allocating the costs of this registration centre.Required:
Recommend to Paragon University a method (or methods)of allocating the costs of registration to
the three departments.

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Definitions:

Net Profit

The amount of money left over after all operating expenses, taxes, and costs have been subtracted from total revenue.

Binding Constraint

A limitation or restriction within an optimization problem that holds equality at the optimal solution; it actively influences the solution of the problem.

Cell Value

The specific data or content stored in an individual cell in a spreadsheet or table.

Constraint

A limitation or condition that must be met in problem-solving or optimization scenarios.