Unit Cost Exercise

Overview of method of allocation of costs

As noted above, the unit costs are obtained by applying the HEA model to the recurrent expenditure of the university. Changes in any of the variables within the model (actual costs and student numbers) will affect the unit cost for the relevant TCD course and subject grouping and, by extension, will also have an impact on the average unit cost across the sector. Average unit costs therefore change from year to year.

Costs are derived from the College's financial year recurrent expenditure and are allocated to courses under three headings- Direct Costs, Allocated Costs, and Apportioned Costs.

• Direct Costs are mainly pay costs that are distributed to courses in proportion to the contact hours involved in lectures, laboratory classes, tutorials/seminars, and supervision. Direct costs include academic staff pay costs (full time and hourly paid); technical pay; faculty and departmental administrative support pay costs; and faculty and departmental non-pay costs including equipment budgets.
• Allocated Costs are those allocated to departments on the basis of usage. These include departmental premises, IS services, library non-pay, and other academic services.
• Apportioned Costs are central costs distributed to courses on the basis of the ratio of the number of students in the course/year to the total number of students in the institution. Costs in this category include central administration costs, library pay, general education expenses, student facilities, and miscellaneous expenditure.

(a) Direct Costs

Direct Costs are mainly pay costs that are distributed to courses in proportion to the contact hours involved in lectures, laboratory classes, tutorials/seminars, and supervision. This information is collected for all teaching staff in each academic department and pay costs are then allocated to courses. Once academic pay costs have been allocated to courses, this information is used to distribute proportionally the other direct costs (technical pay, administrative/executive officer pay, departmental non-pay). Faculty office costs are allocated to each department on the basis of the department's academic pay as a percentage of the total academic pay within the faculty.

(b) Allocated Costs

Allocated costs are calculated initially on a departmental basis and are then allocated to courses on the same basis as Direct Costs, ie. in proportion to the distribution of teaching and supervision hours given by academic staff to students on particular courses. Allocated costs consist of the following:

• Premises: The premises cost is allocated to all areas in College on the basis of gross space occupied. The information on space occupied is provided by the Director of Buildings Office. The total cost of premises is divided by the gross area to give a cost per square meter.
• IS Services: The Director of IS Services provides information on the allocation of costs for the IS Service based on actual usage of facilities. Staff costs are assigned to particular areas depending on their activity.
• Academic Services: This includes the Bio Resources Unit, Audio Visual and Media Services, the Centre for Microscopy and Analysis, and Innovation Services. In broad terms, the costs of these services are distributed on the basis of usage of the service.
• Library Non-Pay: These costs are allocated to academic departments on the basis of the department's percentage share of the total book/journal budget

(c) Apportioned Costs

Apportioned costs consist of the following costs:

• Central Administration (administration, expenses, professional charges)
• Library Pay
• Central Space
• General Education (examinations, scholarship)
• Student Facilities

Apportioned costs are costs that cannot be allocated to departments on the basis of usage. These costs are distributed by dividing the total of the costs above by the total number of students to give an apportioned cost per student.