Virginia State University (VSU) Is Preparing Its Master Budget for the Upcoming

question 39

Essay

Virginia State University (VSU) is preparing its master budget for the upcoming academic year (an academic year consists of two semesters). Currently, 12,000 students are enrolled on campus; however, the admissions office is forecasting a 5% growth in the student body despite a tuition hike to $80 per credit hour. The following additional information has been gathered from an examination of university records and conversations with university officials:
• VSU is planning to award 150 tuition-free scholarships.
• The average class has 30 students, and the typical student takes 15 credit hours each semester.
• Each class is three credit hours.
• Each faculty member teaches five classes during the academic year.
Required:
A. Compute the budgeted tuition revenue for the upcoming academic year.
B. Determine the number of faculty members needed to cover classes.
C. In preparing the university's master budget, should the administration begin with a forecast of students or a forecast of faculty members? Briefly explain.

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Definitions:

Market Power

The ability of a firm to influence the price or quantity of goods or services in a market, often due to its size or unique positioning.

Complementary Resources

Resources or assets that, when combined, enhance the value or performance of each other within a product or service.

Book Values

The net value of a company's assets as recorded on the balance sheet, often differing from market value.

Market Values

The current price at which an asset or security can be bought or sold in the marketplace.