State University Business School (SUBS) offers several degrees, including Bachelor of Business Administration (BBA). The new dean believes in using cost accounting information to make decisions and is reviewing a staff-developed income statement broken down by the degree offered. The dean is considering closing down the BBA program because the analysis, which follows, shows a loss. Tuition increases are not possible. The dean has asked for your advice. If the BBA degree program is dropped, school administration costs are not expected to change, but direct costs of the program, such as operating costs, building maintenance, and classroom costs, would be saved. There will be no other changes in the operations or costs of other programs. STATE UNIVERSITY BUSINESS SCHOOL, BBA DEGREE Degree Income Statement For the Academic Year Ending June 30 Revenue $ 350,000 Costs Advertising—BBA program 12,000 Faculty salaries 195,000 Degree operating costs (part-time staff) 35,000 Building maintenance 31,000 Classroom costs (building depreciation) 60,000 Allocated school administration costs 31,600 Total costs $ 364,600 Net loss $ (14,600) Required: What revenues and costs are probably differential for the decision to drop the BBA program?

State University Business School (SUBS) offers several degrees, including Bachelor of Business Administration (BBA). The new dean believes in using cost accounting information to make decisions and is reviewing a staff-developed income statement broken down by the degree offered. The dean is considering closing down the BBA program because the analysis, which follows, shows a loss. Tuition increases are not possible. The dean has asked for your advice. If the BBA degree program is dropped, school administration costs are not expected to change, but direct costs of the program, such as operating costs, building maintenance, and classroom costs, would be saved. There will be no other changes in the operations or costs of other programs.

STATE UNIVERSITY BUSINESS SCHOOL, BBA DEGREE Degree Income Statement For the Academic Year Ending June 30
Revenue	$	350,000
Costs
Advertising—BBA program		12,000
Faculty salaries		195,000
Degree operating costs (part-time staff)		35,000
Building maintenance		31,000
Classroom costs (building depreciation)		60,000
Allocated school administration costs		31,600
Total costs	$	364,600
Net loss	$	(14,600)

Required:

What revenues and costs are probably differential for the decision to drop the BBA program?