CASE 30

Queensview University

You are a management accountant in the controllers department at Queensville University, You have been given the task of calculating the full cost of educating an average student for one class in each of its faculties. The university president assigned the project to your boss, the controllers, who requested that you complete the project subject to her review.

Queensvillel University is typical of many small universities with its senor management structure and range of facilities. Senor management consists of the president, vice-president academic, dean of students, controller, and the deans of the four faculties: humanities, social sciences, physical sciences, and business.

Most of the information needed for calculating the cost per course per faculty is readily available. In the table below you gathered the number of students in each faculty and the total number of courses (i.e., course registrations) taken. In effect, you are required to calculate the cost of delivering an average course in each faculty to a student. The average student takes eight courses each year or, in other words, four courses per term.

	Humanities	Social Sciences	Business	Total
Students, #	1,000	1,500	1,500	6,000
Course registrations, #	8,000	12,000	12,000	48,000
Rooms booked, #	160	200	200	960
Professors, #	32	40	40	192
Students per class, #	50	60	60	50
Marketing costs, $	160,000	360,000	480,000	1,800.000
Administration costs, $	200,000	300,000	300,000	1,200,000

Professors offer classes to deliver courses; this is done in rooms. For each class a room is booked, thus the number "Rooms Booked" equals the number of classes. In addition, for each room booked/class there is a professor to teach the class. Each professor teaches five classes. There are no Internet or blended courses.

There are two other costs. Professors incur marking costs by hiring markers to mark student papers, examinations, quizzes, and assignments. The marking money is provided to each professor, who hires a marker or markers. Administration cots are incurred to schedule professors, classes, and rooms.

Each class is structures for three hours per week in one term. There are two terms a year. Each physical room can be scheduled five days a week during the following four time slots: 9 am to 12 noon, 12 noon to 3 pm, 3 pm to 6 pm, and 6 pm to 9 pm. There are 30 separate rooms. Each room can accommodate classes from any of the faculties. Annual fixed costs for the 30 rooms are $350,000, and the variable costs are $250,000. Each professor is paid $100,000 per year, and his/her time is devoted to the following activities: 40 percent teaching, 40 percent research, and 20 percent service. About one quarter of each professor's service time is devoted to other activities that are to do with students and thus should be included in the cost of delivering classes.

Required:

Undertake the project as required. Be sure to specify cost pools and drivers, and related calculation, to determine the cost of delivering a course in each of the four faculties. Be sure to use the case approach.