Student Enrollment

Process costing: university enrollments

The university is exploring the possibility of outsourcing part or all of its enrollment function. This function involves three separate processes:

• Validation, where the new student’s secondary school results are sighted and the university’s offer of enrollment is validated.
• Student records, where the student’s study program details for the current year are entered into the student record system.
• Fees collection, where students pay their union fees and upfront course fees, if they choose to do so.

The annual costs of these three processes are:

Cost	Validation	Student Records	Fees Collection
Staff salaries	$60,000	$40,000	$35,000
IT and other equipment insurance	10,000	25,000	20,000
Equipment insurance	1,000	2,100	2,000
Telephone	1,100	3,300	2,000
Data processing	6,300	20,000	5,200
Postage	0	1,000	6,500
Consumables	3,000	35,000	9,000
Electricity	1,200	2,400	2,200

The university processes 14,000 student enrollments per year.

Required:

• Calculate the cost per student enrollment for each process. (2 Marks)
• Calculate the total cost per student enrollment. (2 Marks)
• Does the total cost per student enrollment provide a reliable estimate of the costs incurred to process each enrollment? Explain your answer. (2 Marks)
• Apart from informing its outsourcing decision, how might the university’s management use this information? (2 Marks)
• Would you recommend estimating service costs for all major student services in the university? Explain your answer. (2 Marks