Management Accounting Quarterly, winter, 2001.) The following description of a higher education institution appeared in Management Accounting Quarterly:
In this company, managers have little knowledge of the company's product costs. They treat all products as if they cost the same to produce and sell all products at the same price. Departmental budgets are based on the number of units they produce, and, despite lip service to quality, administrators are more concerned about the quantity of units produced. Departments that fall short of production quotas are expected to pay part of their budget back to the company. Cost increases surpass inflation and are passed on to customers. Customers complain about rising prices and declining quality, but no one takes them seriously. Despite all this, the company stays in business.
Required:
(a) Explain how Activity-Based-Costing and Activity-Based-Management concepts could apply to a higher education institution.
(b). For each of the activity-level activities described below in a manufacturing environment, identify an activity that could be viewed as a similar activity in a higher education institution.
(c) For each activity that you identify, identify an appropriate cost-driver to assign costs to the activity. (Adapted from "Activity-Based Costing for Higher Education Institutions,"

Question

Management Accounting Quarterly, winter, 2001.) The following description of a higher education institution appeared in Management Accounting Quarterly:
In this company, managers have little knowledge of the company's product costs. They treat all products as if they cost the same to produce and sell all products at the same price. Departmental budgets are based on the number of units they produce, and, despite lip service to quality, administrators are more concerned about the quantity of units produced. Departments that fall short of production quotas are expected to pay part of their budget back to the company. Cost increases surpass inflation and are passed on to customers. Customers complain about rising prices and declining quality, but no one takes them seriously. Despite all this, the company stays in business.
Required:
(a) Explain how Activity-Based-Costing and Activity-Based-Management concepts could apply to a higher education institution.
(b). For each of the activity-level activities described below in a manufacturing environment, identify an activity that could be viewed as a similar activity in a higher education institution.
 (c) For each activity that you identify, identify an appropriate cost-driver to assign costs to the activity. (Adapted from "Activity-Based Costing for Higher Education Institutions,"

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The Answer of 
Management Accounting Quarterly, winter, 2001.) The following description of a higher education institution appeared in Management Accounting Quarterly:
In this company, managers have little knowledge of the company's product costs. They treat all products as if they cost the same to produce and sell all products at the same price. Departmental budgets are based on the number of units they produce, and, despite lip service to quality, administrators are more concerned about the quantity of units produced. Departments that fall short of production quotas are expected to pay part of their budget back to the company. Cost increases surpass inflation and are passed on to customers. Customers complain about rising prices and declining quality, but no one takes them seriously. Despite all this, the company stays in business.
Required:
(a) Explain how Activity-Based-Costing and Activity-Based-Management concepts could apply to a higher education institution.
(b). For each of the activity-level activities described below in a manufacturing environment, identify an activity that could be viewed as a similar activity in a higher education institution.
 (c) For each activity that you identify, identify an appropriate cost-driver to assign costs to the activity. (Adapted from "Activity-Based Costing for Higher Education Institutions,"

Management Accounting Quarterly, Winter, 2001