# ADM 626 Grand Canyon University Topic 5 Cost Allocation Spreadsheets

Complete all questions in assignment section of Module. Assignments should be completed in Excel spreadsheets.

Module 5: pages 35-36

Module 7: pages 50-52

Module 8: pages 56-57

Please see attached spreadsheets. The questions are on the first tab. Please read below for detailed instructions to follow.

So for module 5, we are discussing cost allocation methods or how do you, as a budgeter, decide how to allocate indirect costs across an organization’s budget. Direct costs are easy; they go where they are directly tied. Indirect costs must be allocated or shared amongst the different departments or areas in a budget. In an attempt to allocate indirect costs, two conceptsâ€”the pool and the baseâ€”are of fundamental importance. The pool is the total accumulated indirect costs to be distributed to a cost object, and the base is the criteria upon which to allocate the cost pool

The homework questions ask you to use the information provided in the self-checking spreadsheets to create three cost allocations based on the outlined criteria â€“ FTEs, expenditures, and hours worked. You are then to do a short memo explaining the three cost allocation methods and outline which you feel is most appropriate â€“ there is no right or wrong answer here, this is where you make an argument and support it with the data and research.

The same is true for question 5.6; use the information in the self-checking sheet to answer the questions and then you provide your thoughts on which cost driver is most fair.

Module 7 on Inflation is decidedly financing heavy. Since this module has caused some concern in the past, let’s just do question 1, question 2 a and b (only), and for question 4 – only a and b. You do NOT have to do question 3, but you are certainly welcome to complete it for additional practice!

For Module 8. Let’s just do question 1 only. Again, there are no right or wrong answers here. Doing a sensitivity analysis is you using the information at hand and then trying to determine some scenarios based on the criteria provided â€“ policy success, policy failure for doing too little, and policy failure for doing too much.

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