5 departments of ASI, a nonprofit organization, share a rented building. Four of the departments provide services to educational agencies and have little or no competition for their services. The 5th department, Technical Training, provides educational services to the busienss community in a competitive market with other nonprofit and private orgs. Each department is a cost cetner. Revenues received are based on a fee for services. All 5 departments have dedicated space as listed in the atached table. Common shared space (50,000 sq ft), including hallways, restrooms, meeting rooms, and dining areas, is not included in these allocations. Space is rented at $10 per sq ft. In addition to its assigned space, the tech training department offers training during off hours using many of the areas allocated to other departments. Tech training also uses off-site facilities for the same purpose. About 50% of its training activities are in off-site facilities, which have excess capacity, charge no rent, and are available only during off-hours. The admin department's business manager proposed a rental allocation plan based on each department's % of dedicated sq ft plus the same % of the common space. The technical training department would be charged an additional amount for the space it uses during off-hours that is dedicated to other departments. This additional amount would be based on planned usage per year. The director of technical trianing claims this allocation method will cause her to increase the price of services. As a result, she will lose business to competition. She would rather see the allocation method use the % of department revenue in relation to total revenue (I have added this percentage to the chart). Requirement: Comment on Daniel's and Rciahrd's proposed rent allocation plans. Make appropriatte recommendations. I mainly need to know how to finish the spreadsheet to determine cost.
Paper#6058 | Written in 18-Jul-2015Price : $25