Southeast University’s Business College created the Horn Technology Center to centralize all of the computing services within the college. The center coordinates computer purchases for faculty, staff, classrooms, and the computer labs. The center also selects software and administers it. In addition to word processing and spreadsheet programs, the center’s staff maintains large and complex research databases. They design, build, and maintain the college’s extensive website. Finally, the Center provides help on special projects such as developing a Webbased questionnaire or database.
Because it considers itself part of the college, the center does not charge any of its “internal customers” for work done. The Center’s budget comes from the college and comprises staff salaries and equipment such as servers. (The Center bills out, at cost, any computing equipment purchased for a specific user.)
The Center’s director recently approached the dean for approval to charge faculty and departments a flat rate of $50 per hour for any work on special projects. She argued that the Center is handling too many requests for special projects. The dean is puzzled because, a few years ago, the director herself had proposed the idea of special projects as a way to fill in the unevenness in the Center’s workload. It was widely understood that these projects would be completed when time became available. Thus, the projects were using a temporarily idle resource, with no increase in the college’s overall cash outflow.
When he put these arguments to the Center’s director, she argued that the volume of special projects had increased by an order of magnitude over the years, as faculty and staff gained expertise in using the World Wide Web. She also mentioned that it was personally embarrassing to miss promised delivery dates several times in a row. She believed that the charge is a compromise between charging faculty for the full rate (outside consultants may charge up to $100 per hour) and giving them a value-added service for “free.”

Required:
Evaluate the arguments for and against allocating the Center’s cost to faculty and departments. Assume that the Center’s overall expenditure will not change whether or not they continue to do the special projects. (The charge of $50 per hour merely moves money from one account to another and does not alter the total outflow for the college.)