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

question 54

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: $$\begin{array} { | l | r | r | r | } \hline \text { Possible Cost Driver } & \text { BAP } & \text { DSP } & { \text { BGS } } \\\hline \text { Number of students } & 30 & 40 & 100 \\\hline \text { Budgeted expenses } & \$ 5,500 & \$ 4,000 & \$ 500 \\\hline \begin{array} { l } \text { Number of } \\\text { organizations }\end{array} & 1 & 1 & 1 \\\hline\end{array}$$
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:

Freight Costs

Expenses associated with transporting goods from one place to another, which may include shipping, handling, and insurance fees.

Seller

An individual or entity that offers goods or services for sale to consumers or other businesses.

Operating Expenses

Costs incurred in the day-to-day operations of a business, such as rent, utilities, and salaries, excluding the cost of goods sold.

Gross Profit

The difference between sales revenue and the cost of goods sold, indicating the margin earned before accounting for operating expenses.