Multiple choice question, accounting homework help

The Financial Aid Department of the American International University is preparing its annual budget for the coming year. They expect to process financial aid applications from 7,500 students next year. One of the main activities in this department is to “determine (financial aid) eligibility”. Trained employees go through each application to check income, grade point average, prior aid, and other factors to determine if an application should be forwarded to a counselor to determine how much financial aid to grant.

Specially trained financial aid associates perform the “determine eligibility” activity. Each associate receives a salary of $22,000 per year and works 40 hours a week for 50 weeks a year. It takes an associate, on average, 30 minutes to review an application. However, out of each working hour, an associate is idle for approximately 20% of the time taking breaks or waiting for work to arrive. The university can hire part time help on a half-day basis but cannot hire hourly employees to perform this task. Each associate working on applications must have a computer, desk and chair. It costs $2,000 per person to provide a workstation, desk and chair to each person.

How many total associate hours (including both productive and nonproductive) should the university budget to get the work done?

A.3,750 hours

B.4,687.5 hours

C.9,000 hours

D.7,500 hours

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