Activity-Based Costing of Customers: Ethical Issues
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10-33. Activity-Based Costing of Customers: Ethical Issues
Central State College (CSC) is a state-supported college with a large business school. The business school offers an undergraduate degree and training programs for a local manufacturer. The state does not support the training programs, which are paid for by the manufacturer under a fixed-price contract.
The college president has asked the dean of the business school for a breakdown of costs by program. The president will be meeting with state legislators asking for an increase in support for the college’s programs. The dean has assigned you to lead the team that will develop the costs by program.
The business school’s computer lab is a major cost item. The lab is used during the day for the undergraduate program and in the evening for the training program.
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