1.
Cheung,
Tsz
Ching
20199663
Hau,
Shuk
Man
20200319
Mok,
Hoi
Ki
20082169
Wong,
Nga
Ki
20093405
Zhou,
Ruohan
20251019
ACCT
2200
Group
Case
Study
Fall
14

2. P.2
of
9
1.
IB
Program
Special
Education
No.
of
students
615
75
Student-­‐Teacher
Ratio
15:1
6:1
No.
of
teachers
41
12.5
Regular
teacher
salaries
$8954400
$3015000
Average
teacher
salary
$218400
$241200
2.
Category
of
costs
Cost
Behaviour
Regular
teacher
salaries
Step-­‐fixed
Every
increase
of
15
students
increases
the
regular
teacher
salaries
by
the
average
amount.
Substitute
teacher
salaries
Fixed
The
no.
of
substitute
teachers
remains
unchanged
unless
the
programme
is
eliminated.
Aide
salaries
Fixed
The
no.
of
aide
remains
constant
unless
the
programme
is
eliminated.
Teaching
supplies
and
books
Variable
Increasing
the
no.
of
students
increases
the
amount
of
teaching
supplies
and
books
expenses.
Travel
and
Lodging
Fixed
The
school
pays
for
the
lead
teacher’s
expenses
in
the
field
trip.
The
cost
remains
unchanged
unless
the
French
Language
Programme
is
eliminated.
Depreciation
Fixed
Depreciation
expense
of
equipment
remains
constant
even
when
the
no.
of
students
changed.
The
above
analysis
on
cost
behaviour
is
useful
to
Kate
because
if
Kate
would
know
which
cost
can
be
changed
and
which
cannot.
For
example,
if
it
is
a
variable
cost
or
semi-­‐variable
cost,
Kate
can
adjust
it
by
changing
the
level
of
activity.
If
it
is
a
fixed
cost,
there
is
no
way
to
reduce
it
unless
the
whole
programme
is
eliminated.
Therefore,
Kate
better
focus
on
some
changeable
costs
which
is
more
efficient.
3.
There
are
four
budgetary
options
mentioned
in
the
passage:
i)
Cutting
1/3
of
the
French
Language
Programme
ii)
Cutting
2/3
of
the
French
Language
Programme
iii)
Eliminating
the
whole
French
Language
Programme
iv)
Increasing
the
student-­‐teacher
ratio
of
IB
Programme
from
15:1
to
20:1

3. P.3
of
9
Cont’d
Q3
We
also
added
one
more
option
for
Kate,
i.e.
v)
Cutting
one-­‐third
of
the
French
Programme
and
increasing
the
student
-­‐teacher
ratio
of
IB
Programme
to
20:1
at
the
same
time
The detailed budgetary costs and expenses for different options can be referred to the Appendix.
Here is a brief summary for each option.
* 238080/19943580 = 1.194%
4.
The
target
for
Kate
is
to
cut
the
budget
to
$17.6
million.
After
comparing
the
4
budgetary
options,
we
suggest
that
Kate
should
keep
the
French
Language
Programme
and
raise
the
teacher-­‐student
ratio
of
the
IB
program
to
1:20,
which
is
the
only
option
that
can
meet
the
target
budget.
By
increasing
the
ratio,
the
number
of
the
regular
teachers
in
the
IB
Programme
would
be
reduced
to
31.
The
total
cost
saved
by
the
option
is
around
$2.3m
and
the
new
total
budget
cost
would
just
below
$17.6m
as
shown
in
the
above
table.
We
have
found
that
cutting
the
enrollment
of
the
French
Language
Programme
cannot
help
meet
the
targeted
budget.
It
is
because
most
of
the
costs
are
fixed.
These
fixed
costs
are
just
Total
Direct
and
Indirect
Costs
Average
Cost
per
registered
student
Total
saving
Saving
per
registered
student
Percentage
saving
-­‐
Original
cost
-­‐
$19,943,580
$28,904 -­‐
-­‐
-­‐
Options
Cutting
1/3
of
the
French
Language
Programme
$19,705,500
$28,559
$238,080
$345
1.194%*
Cutting
2/3
of
the
French
Language
Programme
$19,368,043
$28,122
$539,526
$782
2.705%
Eliminating
the
French
Language
Programme
$18,522,289
$26,844
$1,421,291
$2,060
7.127%
Increasing
the
student-­‐teacher
ratio
of
IB
Programme
to
20:1
$17,584,460
$25,485
$2,359,120
$3,419
11.83%
Cutting
1/3
of
the
French
Programme
and
increasing
the
student-­‐teacher
ratio
to
20:1

4. P.4
of
9
allocated
to
other
programmes
when
the
French
programme
is
cut
or
eliminated.
Not
much
costs
are
actually
reduced.
Therefore,
Kate
should
keep
the
French
Language
Programme
while
increasing
the
teacher-­‐student
ratio
of
the
IB
Programme
to
1:20.
If
Kate
needs
to
further
lower
the
cost,
she
might
do
so
by
combining
different
options.
For
example,
she
might
cut
the
enrollment
of
French
Program
by
one-­‐third
and
raise
the
teacher-­‐
student
ratio
of
the
IB
Programme
to
1:20
at
the
same
time.
As
shown
in
option
5,
the
total
cost
saved
would
be
$ 2596800.
She
might
also
further
increase
the
teaching
ratio
of
the
IB
Programme
while
keeping
the
maximum
enrollment
of
the
French
Programme
to
be
180.
However,
she
might
need
to
be
aware
of
the
decrease
in
teaching
quality
when
she
chose
to
increase
the
teacher-­‐student
ratio.

5. P.5
of
9
Option
1
Cutting
one-­‐third
of
the
French
Language
Programme
Clear
Water
Bay
High
School
Budgeted
Statistics
and
Expenses
IB
Program
Special
Education
Program
French
Language
Program
Other
Program
Total
Statistics
No.
of
registered
students
615
75
120
450
690
Direct
Costs
-­‐
Teaching
Regular
teacher
salaries
$8,954,400
$3,015,000
$480,000
$120,000
$12,569,400
Substitute
teacher
salaries
$297,600
$100,000
$0
$0
$397,600
Aide
salaries
$162,400
$72,800
$52,000
$24,000
$311,200
Teaching
supplies
and
books
$678,960
$298,200
$44,160
$8,800
$1,030,120
Travel
and
Lodging
$0
$0
$24,000
$0
$24,000
Depreciation
$98,400
$64,000
$320,000
$0
$482,400
Total
$10,191,760
$3,550,000
$920,160
$152,800
$14,814,720
Direct
costs
-­‐
Administration
Administrative
salaries
$712,397
$239,868
$38,188
$9,547
$1,000,000
Administrative
supplies
$88,337
$29,744
$4,735
$1,184
$124,000
Operations
and
maintenance
$1,404,000
$324,000
$216,000
$216,000
$2,160,000
Other
$42,744 $14,392
$2,291
$573
$60,000
Total
$2,247,478
$608,004
$261,215
$227,304
$3,344,000
Total
Direct
Costs
$12,439,238
$4,158,004
$1,181,375
$380,104
$18,158,720
Indirect
Costs
-­‐
Allocated
from
Central
Office
School
Committee
$19,662
$6,620
$1,054
$263
$27,600
Administration
$246,760
$83,086
$13,228
$3,307
$346,380
Heal/Life
insurance
$756,748
$254,801
$40,565
$10,141
$1,062,256
Operations
and
maintenance
$37,908
$8,748
$5,832
$5,832
$58,320
Rent
and
depreciation
$17,940
$4,140
$2,760
$2,760
$27,600
Contract
services
$16,043
$1,957
$3,130
$11,739
$18,000
Travel
$4,719
$1,589
$253
$63
$6,624
Total
$1,099,780
$360,941
$66,822
$34,106
$1,546,780
Total
Direct
and
Indirect
Costs
$3,347,258
$968,945
$328,037
$261,410
$19,705,500
Average
Cost
per
registered
student
$28,559

6. P.6
of
9
Option
2
Cutting
two-­‐third
of
the
French
Language
Programme
Clear
Water
Bay
High
School
Budgeted
Statistics
and
Expenses
IB
Program
Special
Education
Program
French
Language
Program
Other
Program
Total
Statistics
No.
of
registered
students
615
75
60
450
690
Direct
Costs
-­‐
Teaching
Regular
teacher
salaries
$8,954,400
$3,015,000
$280,000
$120,000
$12,369,400
Substitute
teacher
salaries
$297,600
$100,000
$0
$0
$397,600
Aide
salaries
$162,400
$72,800
$52,000
$24,000
$311,200
Teaching
supplies
and
books
$678,960
$298,200
$22,080
$8,800
$1,008,040
Travel
and
Lodging
$0
$0
$24,000
$0
$24,000
Depreciation
$98,400
$64,000
$320,000
$0
$482,400
Total
$10,191,760
$3,550,000
$698,080
$152,800
$14,592,640
Direct
costs
-­‐
Administration
Administrative
salaries
$723,915
$243,747
$22,637
$9,701
$1,000,000
Administrative
sypplies
$92,813
$31,187
$0
$0
$124,000
Operations
and
maintenance
$1,404,000
$324,000
$216,000
$216,000
$2,160,000
Other
$40,413 $17,749
$1,314
$524
$60,000
Total
$2,261,141
$616,683
$239,951
$226,225
$3,344,000
Total
Direct
Costs
$12,452,901
$4,166,683
$938,031
$379,025
$17,936,640
indirect
Costs
-­‐
Allocated
from
Central
Office
School
Committee
$19,980
$6,727
$625
$268
$27,600
Administration
$250,750
$84,429
$7,841
$3,360
$346,380
Heal/Life
insurance
$716,352
$241,200
$22,400
$9,600
$1,046,256
Operations
and
maintenance
$37,908
$8,748
$5,832
$5,832
$58,320
Rent
and
depreciation
$17,940
$4,140
$2,760
$2,760
$27,600
Contract
services
$9,225
$1,125
$900
$6,750
$18,000
Travel
$4,795
$1,615
$150
$64
$6,624
Total
$1,056,950
$347,984
$40,508
$28,634
$1,474,076
Total
Direct
and
Indirect
Costs
$13,509,851
$4,514,667
$978,538
$407,660
$19,410,716
Average
Cost
per
registered
student
$28,131

7. P.7
of
9
Option
3
Eliminating
the
French
Language
Programme
Clear
Water
Bay
High
School
Budgeted
Statistics
and
Expenses
IB
Program
Special
Education
Program
French
Language
Program
Other
Program
Total
Statistics
No.
of
registered
students
615
75
0
450
690
Direct
Costs
-­‐
Teaching
Regular
teacher
salaries
$8,954,400
$3,015,000
$0
$120,000
$12,089,400
Substitute
teacher
salaries
$297,600
$100,000
$0
$0
$397,600
Aide
salaries
$162,400
$72,800
$0
$24,000
$259,200
Teaching
supplies
and
books
$678,960
$298,200
$0
$8,800
$985,960
Travel
and
Lodging
$0
$0
$0
$0
$0
Depreciation
$98,400
$64,000
$0
$0
$162,400
Total
$10,191,760
$3,550,000
$0
$152,800
$13,894,560
Direct
costs
-­‐
Administration
Administrative
salaries
$701,239
$236,111
$0
$9,397
$946,747
Administrative
sypplies
$86,954
$29,278
$0
$1,165
$117,397
Operations
and
maintenance
$1,404,000
$324,000
$0
$216,000
$1,944,000
Other
$42,074 $14,167
$0
$564
$56,805
Total
$2,234,267
$603,556
$0
$227,126
$3,064,949
Total
Direct
Costs
$12,426,027
$4,153,556
$0
$379,926
$16,959,509
indirect
Costs
-­‐
Allocated
from
Central
Office
School
Committee
$20,443
$6,883
$0
$274
$27,600
Administration
$256,557
$86,384
$0
$3,438
$346,380
Heal/Life
insurance
$798,645
$268,908
$0
$10,703
$1,078,256
Operations
and
maintenance
$39,852
$10,692
$0
$7,776
$58,320
Rent
and
depreciation
$18,860
$5,060
$0
$3,680
$27,600
Contract
services
$9,711
$1,184
$0
$7,105
$18,000
Travel
$4,906
$1,652
$0
$66
$6,624
Total
$1,148,974
$380,764
$0
$33,042
$1,562,780
Total
Direct
and
Indirect
Costs
$13,575,001
$4,534,320
$0
$412,968
$18,522,289
Average
Cost
per
registered
student
$26,844

8. P.8
of
9
Option
4
Increasing
the
student-­‐teacher
ratio
of
the
IB
Program
to
20:1
Clear
Water
Bay
High
School
Budgeted
Statistics
and
Expenses
IB
Program
Special
Education
Program
French
Language
Program
Other
Program
Total
Statistics
No.
of
registered
students
615
75
180
450
690
Direct
Costs
-­‐
Teaching
Regular
teacher
salaries
$6,770,400
$3,015,000
$680,000
$120,000
$10,585,400
Substitute
teacher
salaries
$297,600
$100,000
$0
$0
$397,600
Aide
salaries
$162,400
$72,800
$52,000
$24,000
$311,200
Teaching
supplies
and
books
$678,960
$298,200
$66,240
$8,800
$1,052,200
Travel
and
Lodging
$0
$0
$24,000
$0
$24,000
Depreciation
$98,400
$64,000
$320,000
$0
$482,400
Total
$10,191,760
$3,550,000
$1,142,240
$152,800
$12,852,800
Direct
costs
-­‐
Administration
Administrative
salaries
$639,598
$284,826
$64,239
$11,336
$1,000,000
Administrative
sypplies
$79,310
$35,318
$7,966
$1,406
$124,000
Operations
and
maintenance
$1,404,000
$324,000
$216,000
$216,000
$2,160,000
Other
$38,376 $17,090
$3,854
$680
$60,000
Total
$2,161,284
$661,234
$292,059
$229,422
$3,344,000
Total
Direct
Costs
$12,353,044
$4,211,234
$1,434,299
$382,222
$16,196,800
indirect
Costs
-­‐
Allocated
from
Central
Office
School
Committee
$17,653
$7,861
$1,773
$313
$27,600
Administration
$221,544
$98,658
$22,251
$3,927
$346,380
Heal/Life
insurance
$577,900
$257,351
$58,043
$10,243
$903,536
Operations
and
maintenance
$37,908
$8,748
$5,832
$5,832
$58,320
Rent
and
depreciation
$17,940
$4,140
$2,760
$2,760
$27,600
Contract
services
$16,043
$1,957
$4,696
$11,739
$18,000
Travel
$4,237
$1,887
$426
$75
$6,624
Total
$893,225
$380,601
$95,780
$34,889
$1,388,060
Total
Direct
and
Indirect
Costs
$3,054,509
$1,041,836
$387,840
$264,311
$17,584,860
Average
Cost
per
registered
student
$25,485