As a group you are the senior teaching staff of a school where each subject department is regarded as a cost centre. The direct costs of each cost centre are teachers’ salaries, books and worksheets for pupils. The overhead costs of the school administration are charged to each cost centre as a fixed percentage of teachers’ salaries in the cost centre. The languages department argues that this is unfair to them as they have a higher ratio of teachers to pupils due to the need for developing spoken language skills. The art department objects to the percentage charge because it includes accommodation costs without recognising that they are housed in portacabins where the roof leaks. The maths department says that they should not have to share the costs of expensive technical equipment when all they need for effective teaching is a piece of chalk. One member of staff has read about ‘cost drivers’ and the teachers have decided that they would like to meet the school accountant to put forward some ideas about using cost drivers. So far they have made a list of the main overhead costs as:

• Heating and lighting

• Head teacher, deputy heads and office staff salaries

• Cleaning

• Maintenance

• Library

• Computing services for staff

• Computing labs for pupils

• Insurance of buildings and contents.

Allocate among your group the roles of staff in the languages, art and maths departments. Discuss cost drivers for each of the overhead costs listed and attempt to arrive at an agreement on cost drivers to be presented to the school accountant. What are the problems of agreeing the drivers? What are the benefits?