Close-end matching grants, Cost Accounting

Assignment Help:

RC School District has a large number of students in need of remedial instruction.  The superintendent of RC School System can allocated her budget between purchasing X units of remedial instruction at a price of $2,000 / unit and spending an amount ($Y) on all other school activities.  (For the purposes of this problem, assume that “all other school activities” can be viewed as a composite commodity with a per-unit price of $1,000.)  The Superintendent has a budget of $800,000, raised through local taxes, to allocate between the two activities.

The State Legislature is considering ways to induce RC County to purchase more units of remedial education for underachieving students.  It is specifically considering various forms of grants.

1. Budget Constraints

a. Draw and label Superintendent’s budget line with no State aid (Make sure to put units of remedial instruction on the horizontal axis)

b. Assume the Superintendent chooses to purchase 100 units of remedial instruction and 600 of “other school activities.  Label this is allocation as point “K” on your diagram

2. Open-Ended Matching Grants

a. One option for the State is an open-ended matching grant, under which the state would match RC School District one-for-one every dollar the District spends on remedial instruction.  Draw and label the superintendent’s new budget constraint under this program (you should draw this new budget line on the same graph you produced in #1 above)

3. Close-End Matching Grants

a. A legislator, fearing school districts will respond so aggressively to the subsidy for remedial instruction provided by the matching grant that it will be too costly, proposes that the matching grant program be closed-ended, such that no district can receive more than $100,000 of state aid.  Draw and label the Superintendent’s budget constraint under this closed-end matching grant program (You should draw a new budget line, using the same chart from #1 and #2 above)

b. As a legislator interested in increasing remedial education services, do you think making the matching grant closed ended will lead RC County to provide fewer units of remedial education than if the matching grant were open ended?  Explain.  (Hint, think about income and substitution effects).


Related Discussions:- Close-end matching grants

Objective type question, 9. When in the management process do managers seek...

9. When in the management process do managers seek an answer to the question "Did we meet our cost-reduction goals for non-value-adding activities?" a. Planning b. Performing c. Ev

Costs and revenues over a range of activity levels, 1. Single product or si...

1. Single product or single mix of products 2. Variable cost, fixed cost and selling price are constant 3. The level of production will equal the level of sales Example:

Cost accountant and cost analysis, Cost Accountant and Cost Analysis ...

Cost Accountant and Cost Analysis Cost Accountant Is a member of chief accounting officers department? And he is responsible for collecting product costs and preparing ex

Standard costing, What are the benefitss and drawbacks of standard costing?...

What are the benefitss and drawbacks of standard costing?

Analyse the data and prepare a report, The data set for the assignment is a...

The data set for the assignment is about breast cancer.  Some of these data have been changed for the purposes of this assignment so the results from the analysis of this file may

Prepare the report and explaining the growth, You are a beginner accountant...

You are a beginner accountant with a large accountancy firm and a training day has been organised to update all technical staff on a range of topics across numerous technical disci

Standard costing and variance analysis using kaizen costing, Discuss how SD...

Discuss how SD can use standard costing and variance analysis to prepare meaningful reports when using Kaizen Costing. By the use of standard costing and variance analysis, fr

Price to set on the job, Bakeson Bearings Ltd is preparing to submit a bid ...

Bakeson Bearings Ltd is preparing to submit a bid for a bearings order.  Janet Lake,  CEO of the Manufacturing Division, has asked Jason Docker, the management accountant, to prepa

Contribution, CONTRIBUTION : It is the variation between the marginal cost ...

CONTRIBUTION : It is the variation between the marginal cost of sales and sales and it contributes towards fixed profit and expenses.  It is differ from the profit which is the net

Determine opportunity costs, Determine Opportunity Costs A company has...

Determine Opportunity Costs A company has material B in stock that originally cost Shs. 5000 for the 1000 Kshs in stores. The material is missing over from an old purchase ord

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd