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Costing Activities at ANU: Insights From Renée Brand, Finance Manager, CECS

This comprehensive overview on costing provides insights into methods for applying organizational costs to specific products or services at ANU's College of Engineering and Computer Science. The discussion covers the importance of understanding costs, types of expenses, cost pools, activities, and cost drivers that influence expenses. It emphasizes the need for analyzing costs to make informed decisions regarding projects, student numbers, and resource allocation. This valuable information includes examples and questions to facilitate better costing practices within the university.

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Costing Activities at ANU: Insights From Renée Brand, Finance Manager, CECS

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  1. Costing Activities at ANU: insights Renée Brand Finance Manager College of Engineering & Computer Science 31 August 2011

  2. Costing overview • What is costing & why look at costs • Expenses and Cost Pools • Activities • Cost Drivers • Applying costs to Activities • Example • Questions

  3. What is costing? • Costing is a method of applying the costs of the organisation to a specific product or service to determine the full cost of the product or service

  4. Why look at costs? • Know what our costs are • Determine what influences these costs eg student numbers, staff numbers • Fully cost projects • Make decisions based on these costs • How much will it cost if we increase our student numbers? • What project costs can we recover from a funding body and how much will the College contribute as in-kind?

  5. Costing steps • Analyse the costs of an organisation and determine the cost pools • Determine the activities of the organisation • Determine what drives or influences these costs (cost drivers) • Attribute these costs across the activities of the organisation

  6. 1. What are our costs • Types of expenses: • Salaries & wages • Travel • Expendable research materials • Equipment (capital and non-capital) • Utilities & maintenance • IT equipment/services • Telephone & internet • Postage & stationery

  7. Where are these costs incurred?

  8. Cost Pools • Expenditure can be grouped into cost pools of similar type of expenditure • Generally costs are grouped where the expense is incurred (i.e. at ANU, College, School or Project level) • CECS example shown, though can differ for each College

  9. 2. What are our activities? • What products or services are we providing? • Academic/Teaching services vs. Administration services • CECS example shown, though are there any other activities you can think of?

  10. 3. Cost Drivers • What is a cost driver? • A factor that can cause a change in the cost of an activity • Cost drivers at the ANU • Student numbers • Staff numbers • Any others? Example – an increase in student numbers could result in an increase in teaching staff

  11. Student numbers • What costs do students influence (drive)? • Student Services support • School Administration support • Scholarships • IT requirements • Building space • Electricity & gas usage • Any others?

  12. Student numbers cont... • Who do we include • Undergraduate (UG) • Post graduate coursework (PGCW) • Higher Degree by Research (HDR) • Does each type of student incur a similar amount of expenditure (think of HDR vs. undergraduate student)

  13. Staff numbers • What costs do staff drive? • College Administration support • School Administration support • Building space • Electricity & gas usage • IT requirements • Telephone/internet • Any others?

  14. Staff numbers cont... • Who do we include • Staff • Adjuncts • Visiting Fellows • OT Visitors • Does each type of staff member incur a similar amount of expenditure? • Consider FTE vs. body count

  15. 4. Applying costs to activities • COST POOLS • University Admin • College Admin • Scholarships • Infrastructure • School Admin • Teaching & Research • Labs & Workshops • ACTIVITIES • College Admin • Scholarships • School Admin • Teaching & Research • Labs & Workshops COST DRIVER

  16. Example - Laboratory Costs

  17. Direct Costs

  18. Indirect Costs How do we allocate the above costs to the lab? Now we will see how expenses and cost drivers interact.....

  19. Indirect costs - School Administration

  20. Indirect costs - College Administration

  21. Indirect costs - Infrastructure Note – only included Utilities in above example

  22. Indirect costs summary • Note – assume 3 staff work in labs • Note – excluded University Administration costs

  23. Total Cost of Laboratory

  24. What can we do with this information? • Use this information to determine a lab usage charge • Ensure accurate laboratory costs are included in project budgets • Determine which costs can be charged to a project and which are in-kind • We then know what parts of the lab are not funded by the project and need to be funded elsewhere

  25. Questions???

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