CFOS/Unit Costs/Exercise 5.1
Exercise 5.1 - Backflush Costing
An open school in Illinois provides courses leading to the high-school equivalency diploma (senior secondary certificate) for adults who dropped out of school early. Each course lasts one academic year and students need to successfully complete eight subject-courses in order to get their diploma. In the USA, those who obtain their high-school diploma are referred to as ‘graduates’. The table below provides the following information for a five-year period:
- total expenditure by the institution in the relevant year,
- number of subject-courses delivered,
- number of subject-course passes.
|Total Costs (US$)||1,986,700||2,132,200||2,568,900||2,587,300||2,604,100|
|Cost per Subject-Course Delivered|
|Number of ‘Graduates’|
|Cost per ‘Graduate’|
1. Copy the table above on a blank piece of paper;
2. Using the Backflush Costing approach, calculate the following figures for the years 2000/01 to 2004/05:
- unit costs per subject-course delivered,
- number of 'graduates', and
- unit costs per ‘graduate’;
3. Write these into the blank cells of the table.