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Question: hello i have a question from my textbook management accounting...

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Hello,

I have a question from my textbook Management Accounting 8th edition by Lnagfiel-Smith, Smith, Aldon, Hilton, Thorne

Chapter 6; P6.40

Flagstaff University is exploring the possibility of outsourcing part or all of its enrolment function. This function involves three separate processes:

a) validation, where the new stident's secondary school results are sighted and the university's offer of enrollment is validated;

b) student records, where the student's study program details for the current year are entered into the student record system;

c) fees collection, where students pay their union fees and upfront course fees, if they choose to do so.

The annual costs of these 3 processes are:

 

Cost Validation Student records Fees collection
Staff salaries $90 000 $60 000 $52 500
IT and other equipment depreciation 15 000 37 500 30 000
Equipment insurance 1 500 3 150 3 000
Telephone 1 650 4 950 3 000
Data processing 9 450 30 000 7 800
Postage 0 1 500 9 750
Consumables 4 500 52 500 13 500
Electricity 1 800 3 600 3 300

The university processes 14 000 student enrolments per year.

Required:

1. Calculate the soft per student enrolment for each process

2. Calculate the total cost per student enrolment

3. Does the total cost per student enrolment provided a reliable estimate of the costs incurred to process each enrolment? Explain your answer.

4. Apart from informing its outsourcing decision, how might the university's management use this information?

5. Would you recommend estimating service costs for all major student services in the university? Explain your answer. 

 

Thank you!

Natalie

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