Full costing of business programs: benefits and caveats
International Journal of Educational Management
ISSN: 0951-354X
Article publication date: 1 January 2006
Abstract
Purpose
To suggest an approach to program costing that includes the approaches and concepts developed in activity based costing.
Design/methodology/approach
The paper utilizes a hypothetical case study of an Executive MBA program as a means of illustrating the suggested approach to costing.
Findings
The paper illustrates both the benefits of using an activity based costing approach and the danger of allocating organizational sustaining costs to a specific program for the purpose of assessing the profitability of that program.
Practical implications
University and faculty administrators will understand the benefits of activity based costing and they will understand that they should not evaluate the profitability of a program (nor make decisions about the termination of a program) on the basis of allocated organizational sustaining costs.
Originality/value
The value of the paper is to university and faculty administrators, who will be able to utilize a new approach to costing university programs.
Keywords
Citation
Simmons, C., Wright, M. and Jones, V. (2006), "Full costing of business programs: benefits and caveats", International Journal of Educational Management, Vol. 20 No. 1, pp. 29-42. https://doi.org/10.1108/09513540610639576
Publisher
:Emerald Group Publishing Limited
Copyright © 2006, Emerald Group Publishing Limited