Reference no: EM132655714

Capital University, a mid-size university located in a capital city
has approximately 10,000 students studying in four departments. While the University's goal is not to make a profit, it is also important that the University does not operate at a loss. The only source of revenue is tuition and government grants. The government gives the University $14,000 a year for each full-time student.

Faculty:                        Arts                Science             Engineering             Business
Number of Courses        120                200                150                      150
Number of Students       4,800             2,000             600                        2,700

Other Information:

1. Each Course is only offered once each year
2. Each student is enrolled in 10 classes per year
3. Each faculty member is paid $120,000 per year and teaches 6 courses per year
4. Total student support costs are $139,992,700 per year. These cost include student services and administration. Each student generally requires an equal amount of support.
5. Building costs are $12,400,000 per year. Costs are equal for each class.
6. Other costs $17,000,000 (Science labs $10million, Business trading room $2million, Engineering labs $5million).

REQUIRED

Question 1. The Dean has asked you to use this information to determine how much tuition should be charged assuming the same amount of tuition should be charged to each student and the University breaks even.

Question 2. Using Activity Based Costing, calculate how much tuition should be charged to students in each faculty.