CFOS/Unit Costs/Exercise 5.1
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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.
| 2000/01 | 2001/02 | 2002/03 | 2003/04 | 2004/05 | |
|---|---|---|---|---|---|
| Total Costs (US$) | 1,986,700 | 2,132,200 | 2,568,900 | 2,587,300 | 2,604,100 |
| Subject-Courses Delivered | 2,312 | 2,428 | 2,633 | 2,576 | 2,498 |
| Cost per Subject-Course Delivered | |||||
| Subject-Courses Passed | 1,891 | 1,944 | 2,103 | 2,138 | 1,987 |
| 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.
