De Anza College

Accounting 1C

How Much Money Does Your Friend Need?

The Situation

You have a good friend who is going to college next year. Your friend heard that you are taking Managerial Accounting and has asked for your help in planning for next year. Your friend has asked you to help prepare an expense budget for the next school year…the nine months from September to June. After you prepare the expense budget, you should figure out how much money your friend will have to earn during the summer to pay for the nine months of college. Your friend wants to devote all of her/his time to studying and does not want to work during the school year.

The Task

1. Form a group with 3 to 5 people. (No more than 5 people please.) Introduce yourselves.

2. Decide on a name for your friend.

3. List all the expenses that your friend will have during the school year. List the total for nine months…you do not need to break down the expenses by month. Total up the expenses. Be sure to write down any assumptions you are making about your friend’s estimated costs.

4. Figure how much your friend will have to earn over the summer to pay for college. How much will your friend have to earn per hour in order to get enough money?

5. Write down your responses to the above items. Put the group members name on the top of the paper. You will turn this in at the end of the class.

6. Prepare your group to give a presentation to the entire class. For the group presentation, all members of the group will stand at the front of the class and introduce themselves (first names). They will put their budget on the document camera and explain their numbers.

7. We will draw names out of the hat to determine which groups go first. We may not have enough time to do all of the groups but you should be prepared to make a presentation anyway.