+1 862 207 3288 The Jurong Business School (JBS) was founded in the late 1980s to service the needs of middle managers who do not have a formal business qualification. The university
is based in western part of Singapore. Initially, the Business School offered only one course – one-year advanced diploma in management. In subsequent years demand
for similar courses increased, and within two years JBS was offering two more courses, both advanced diplomas – one in marketing and the other in finance. All
programmes are of one academic-year duration.
JBS rents a well-appointed building in the centre of the city at a cost of SGD$200,000 per annum and is equipped with a well stocked library, up-to-the minute computer
facilities and a sizeable restaurant. The school is run by a full-time director with back-up from full-time programme mangers, each with their own secretarial staff.
In addition, there are several persons employed to service the general administrative and marketing needs of the School. The Director of the School is preparing for
his annual budgeting meeting with the 3 Programme Heads. There is some urgency associated with the situation and the first thing he wants you to do is prepare some
basic management accounting information based on last year. He can then prepare a provisional budget and has supplied you with the following data:
a. Academic programmes: During the previous year, the JBS offered 3 programmes i..e the advanced diplomas in management, marketing and finance. A total of 1,000
students were enrolled of which half of them took the ‘finance’ option, and the balance of students was equally divided between the two remaining programmes. The
academic year is divided into two twelve week teaching semesters. The average instruction time is 16 instruction hours per week in the management programme, 24
instruction hours per week in the marketing programme and 20 hours per week for the finance programme. All the programmes are divided into groups of 125 students each
for teaching purposes.
b. Fees: The fees are, currently, SGD$2,000 for management programme, SGD$3,000 for the marketing programme and SGD$4,000 for the finance programme. However,
JBS has a policy of offering scholarship to deserving students, and 10% of all registered students receive full remission of fees. In other words, there are no fees
to be paid for such students.
c. Faculty members: Currently there are 12 full-time faculty members who are each paid an annual salary of SGD$30,000 (including benefits and insurance). The
average teaching load of each faculty member is 8 hours per week. Currently, one-half of the full-time staff lecture only on the ‘diploma in management’ programme.
The remaining full-time faculty, are split equally between the other two academic programmes. Part-time lecturers are hired as required, although the JBS had some
difficulty in hiring part-time specialist staff in the area of accounting/finance during the last academic year. Part-time teaching staff (faculty) will have the same
teaching load, but be paid on-half the salary paid to the full-time staff. Because of the various lecturing specialism involved, it is not possible to transfer
faculty members between programmes and it may well be that some full-time faculty members do not have a full teaching load.
d. Canteen/restaurant: the canteen facility is provided by an outside catering body who pay the JBS an annual sum of SGD$100,000, which is based on the number of
registered students
e. Other costs: The following is the remuneration of non-lecturing staff and other costs
Director of School SGD$50,000 per annum
3 Programme managers SGD$40,000 per annum, per manager
Programme Administration costs SGD$20,000 per annum, per programme
General Administration costs SGD$25,000 per annum
Library (annual running cost) SGD$50,000 per annum
Cleaning & maintenance SGD$60,000 per annum
f. Student materials: At the start of each course students are presented with specially printed folders containing comprehensive course materials. The cost of
providing special folders is estimated at SGD$20 per student. In addition, photocopying costs are estimated at SGD$200 per student. Any required textbooks must be
purchased by the student themselves. The bookshop is an independent entity within the JBS and pays no fee to use the facility.
g. Miscellaneous costs: Exam correction costs are paid to either lecturers or external correctors in the amount of SGD$50 per student. On reviewing the record of
last year’s exam board meeting, you discover that all students had passed their examination at their first sitting.
Also, because all tuition fees are paid at the start of the academic year, the SBS places the surplus cash on deposit with a local bank. The interest on such funds on
deposit amounted to SGD$5,000 last year. Because of the small amount involved, this sum can be apportioned to the various programmes on the basis of student numbers
and can be described as interest received (or miscellaneous revenue).
Required:
You’re expected to write a report as the Management Consultant to the Board of Directors of Jurong Business School. You must answer the entire tasks addressed below
(Q1-Q7).
Note:
You are not expected to provide references in a consultancy report. If you do source material that helps you make your case to the Company, then, of course, you must
reference it. But this task really only requires basic text-book knowledge, so there is probably little if any need for references.
There is NO word limit to this report. It needs to be long enough to say what is necessary to meet the brief, but no more. Business reports are meant to be short,
simple, easy to read, and directly to the point. Where helpful, they should use tables, charts or other diagrammatic material to save words. Busy managers will not
read a long and rambling report, but nor will they be happy with one that fails to answer the questions they asked of the consultants.
TASK: Answer all questions
1. Calculate the number of part-time academic staff required, if any, for the management, marketing and finance programmes
2. Prepare detailed cost/income statement for JBS for the academic year just passed, based on the information provided. Your format should clearly highlight the
‘contribution’ per programme and the overall cost per student, per programme. Where amounts for cost/revenue need to be apportioned, please apportion on the basis of
student numbers
3. If additional 10 fee-paying students were recruited for the marketing diploma course, what would be the financial impact, assuming that the extra teaching was
done by the additional part-time staff? You may ignore any impact on canteen revenue and interest income.
4. Assume that JBS is faced with an increasingly competitive environment and decides to reduce its course fees by 10% but expected enrolment and all other factors
will remain unchanged. What is the overall financial impact? Clearly present your calculations.
5. Briefly explain three difficulties/assumptions involved in calculating BEP for JBS.
6. The Mission Statement of SBS states that “The mission of the School is to be a centre of excellence in business education by achieving highest international
standards in our research publications and by communication of that knowledge to successive generations through excellence in learning”. Specify 4 performance
measure/indicators which could be monitored to evaluate the School’s progress towards its mission
7. Specify 3 problems which may be encountered in trying to introduce for the first time Performance Measurement System that you have outlined in (6) above.
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