ERIC Number: ED259672
Record Type: Non-Journal
Publication Date: 1985-May
Reference Count: N/A
A Closer Look at Cost Behavior Patterns and the Implementation of New Programs. AIR 1985 Annual Forum Paper.
Lundy, Harold W.
The way that planning tools can be used to evaluate the economic consequences of implementing new academic programs at Grambling State University (GSU) is considered. The focus is projecting cost behavior for planning and decision making. The following planning tools are examined: cost-volume-revenue analysis, cost behavior analysis and least squares, and differential analysis (incremental revenue and incremental students). Educational and General (E&G) expenditures for five previous years and cost projections for new programs were used to predict fixed cost proportions of E&G expenditures. Two scenarios were prepared to assure accuracy and validity in cost predictions. It was found that the fixed cost proportions of GSU's E&G expenditures were not the same as those of other institutions having similar operating conditions. In addition, financial instability could occur if GSU did not fund a higher level of fixed costs resulting from the proposed new programs. The university's operating budget would have to increase by a minimum of 24 percent per scenario one, and 19 percent per scenario two. Among many graphs and tables are those showing: the relationship of cost and revenue to different levels of volume (the number of students); cost formulas; and the calculation of fixed and variable expenditures. (SW)
Publication Type: Reports - Evaluative; Speeches/Meeting Papers
Education Level: N/A
Audience: Researchers; Administrators; Practitioners
Authoring Institution: N/A