Study of student costs using activity based costing methodology - aair

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5. Development of ABC Model for UTS An ABC model was developed on the Lotus 123 spreadsheet package, with five interrelating segments: Segment 1 holds all primary financial data although some manipulations of information in the UTS general ledger were required. Segment 2 incorporates the primary cost drivers arrayed against the activities. Segment 3 incorporates the primary cost allocations; five allocation phases were necessary, utilities being allocated initially and further phases to account for the cross servicing between departments. The following figure provides an illustration of this allocation process. 19 Segment 4 includes secondary drivers to the four student cost categories. Segment 5 is where the secondary allocation (to students) is undertaken. The individual costs allocated to faculties in segment 3 are transferred to the faculty total column and then allocated into the four student categories on the basis of the cost drivers in Segment 4. Segment 5 also includes those costs allocated to students not included in Segment 3 and had therefore not previously been allocated to faculties. The following figure illustrates this secondary allocation process. 20 19 Ibid., Figure 2. 20 Ibid., Figure 3.
Explanation of the secondary cost allocation 6. Analysis of Student Costs The following table summarises the total of student costs per EFTSU. 21 Student costs: Total student costs per EFTSU Average Faculty costs Average Administrative costs Total Undergraduate Part-time Full-time 6,076 4,398 3,501 2,235 9,577 6,633 Part-time 7,180 4,264 11,444 Postgraduate Full-time 8,043 2,929 10,972 The results of the financial model revealed: 1. Only small variations in central administration or support costs between part-time and full-time students. 2. The vast majority of central administration costs which reflect centralised overheads and support activities, are dependent on actual student numbers as opposed to EFTSUs; the only exceptions are library costs and computing costs which are affected by student workload. 3. A number of support activities within faculties are dependent upon student numbers and are unrelated to student workload, eg. course development and administration. 4. As a university average, the total cost of part-time undergraduate students when viewed in terms of cost per EFTSU is 44% higher than full-time undergraduate students. The broad conclusions from the study were: 1. Student cost is not proportional to a student’s workload (or EFTSU); 21 Ibid., Figure 3.
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Study of student costs using activity based costing methodology - aair

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