Management Undertakes a Series of Steps During Each Cost Volume Profit Analysis Review

1. Introduction

Vietnamese public universities operate primarily on the mechanism of country budget allocations. This leads to the passive way in direction activities and fiscal direction in particular (Tran, 2016). To overcome these limitations, the Regime of Vietnam has handed over autonomy to public universities, by the Prime number Minister's Decree No. xvi/2015/ND-CP on February fourteen, 2015(Government, 2015). Facing integration requirements and the application of autonomy, Vietnamese public universities needed to make continuous efforts to amend the quality of training, prestige and competitiveness (Le, 2017). In social club to enhance command of costs, revenues and profits, and promoting the quality of grooming, the leadership of Vietnam's public universities is forced to pay attention to decision-making, including information derived from Cost-Volume-Profit (CVP) analysis. The bodily survey results show that the financial information at the Vietnamese public universities was limited to some basic data such as: (i) Expense elements such equally salaries, scholarships, outside services, etc. (according to the Country budget index), there was lack of variable costs and stock-still costs data, which was the basis for making decisions with each increasing options or costs controlling to each section; (two) Data on budgeting that complied with the norms, regimes and standards of the State; (iii) Information on management decentralization was non yet associated with the responsibility for cost control of departments; (four) Information on costs, break-fifty-fifty points, preparation costs for a educatee was not synchronized, based on the personal experience of the administrators. Therefore, the decisions of the leaders were focused on the curt term and not associated with more mod management methods such every bit responsibility accounting in gild to assign expenditures and revenues to each section; information technology would produce balanced scorecard to promote the power of the system synchronously, towards achieving the universities goals in the long term. Limited information provision in Vietnamese public universities has reduced their effectiveness.

The CVP analysis is a technique whereby each change in cost, volume, and toll will comes across with turn a profit (Kaplan & Atkinson, 2007). Over time, the CVP analysis has become increasingly popular and generated useful information, related to control production output, plan and brand decisions such every bit types of products, their volume, expanding or narrowing a product line, break-even point of output, revenue and time, and consumption to accomplish the target turn a profit (Bauer & Bauer, 2018). According to Gean and Gean (2015), the CVP analysis is an important method to capture the reaction and the relationship betwixt activities, costs, volumes and profits, providing a wealth of relevant information useful for decisions in short term. The CVP analysis is aimed at determining the output that adds value to the business, emphasizes the impact of fixed costs, break-fifty-fifty points, target profits that determine sales volume and revenue estimates. Making price decisions and price structures is simpler when using the CVP analysis. In addition, the CVP assay provides users with data nearly the safety margin of a fall in salesthat tin be maintained before sales reach break-even, and imminent losses if sales fall in the next stage.

The CVP analysis, applied to universities like businesses, includes determining fixed costs, variable costs, break-even points for each grade; number of required students in each course; continued training, narrow or stop for classes, courses, or majors; how many training courses are needed for the schoolhouse to meet its profit goals, etc. The awarding of the CVP analysis model analyzes the toll of the number of students and the income, determine the minimum number of students trained to break even, remainder the upkeep and make up one's mind enrollment targets for the next twelvemonth, etc., is essential. Therefore, this study considers and evaluates: (i) the situation of cost nomenclature for the CVP analysis in Vietnamese public universities, (2) the reality of using CVP analytical data to make decisions in Vietnamese public universities, (3) the request data on the CVP analysis from academy leaders to make a decision, and (iv) the suggestions for applying the CVP analysis to decisionmaking in Vietnamese public universities.

2. Literature Review

The CVP analysis is conducted based on a series of bones assumptions nearly the relevant parameters that limit the relevant output volume: total price, unit price, unit of measurement price variable, and unit margin. Using the information from a CVP analysis, managers will find the relationship between cost (C), output volume (V) and turn a profit (P). The CVP analysis is an effective way to forecast costs, realize target profits, and analyze a company'due south decisions. Until now, the CVP analysis has been more than widely used in business than in educational activity.

ii.1. Studies on CVP Analysis in Business

Researching the use of the CVP assay in decisionmaking, Buşan and Dina (2009)showed the CVP relationship every bit the way of developing total acquirement, full cost and operating profit. The volume of production, unit prices, unit of measurement variable cost, or stock-still cost assistance managers reply diverse questions such equally: How volition income and costs be affected if the volume sold out is unchanged? What will happen if unit prices increase or decrease? Whether to expand business in foreign markets?

Stock-still costs in hotels tend to be loftier, and so when the acquirement drops significantly below break-even, the losses will be high. Therefore, the traditional price-volume-profit analysis model is widely used in the hotel industry to make up one's mind break-even bespeak. Phillips (1994) looked at the basic toll-book-turn a profit analysis model and described how to include uncertainties in the decision-making process. It has therefore been shown to determine probabilities for different expected levels of return, and also to consider another inherent operational difficulties of the bones cost-volume-turn a profit analysis model.

As regards the multidisciplinary company assay based on a micro approach, Kim (2015) developed a micro approach to find pause-even points and target turn a profit. This study attempted to develop a systematic approach to refine the answers of two basic issues in the CVP analysis: break-even signal and target profit. Jiang and Shen (2017) conducted an analysis of the restaurant's toll, interruption-even, safe performance level, and the impact of eatery profit due to changes switch cistron. This upshot helped the eating house manager make improve decisions by analyzing multi-chemical element positioning in the service manufacture and examining the relationship between the key elements of the service industry and the profit due to factor change.

Punniyamoorthy (2017) stated that the CVP analysis was a tool to assess the touch of changes in value, volume, variable costs or fixed costs on benefits. Moreover, CVP was the basis for pricing, deciding short-term options, target costs and value of the exchange.

Lulaj and Etem Iseni (2018) argued that the CVP analysis was an important content to plan and make decisions in business. The inquiry was carried out in manufacturing and service businesses, using a combination of econometric models to make this research accurate and effective. The results showed that the amount of produced products had a positive affect on the sales for service companies and increased profits for the manufacturing business concern, there was an important relationship between production and sales.

Stoenoiu (2018) conducted a study on the sensitivity ofthe indicators used in the CVP assay. The research was based on the need to optimize and manage costs due to unforeseen economic events in all areas. Therefore, this study analyzed the dependency relationship among the three CVP indices to highlight the need for permanent monitoring and optimization of these variables to provide a reliable basis for management decisions. The research showed the extent and significance of the changes toward one or more variables due to the direct relationship and inversion betwixt these variables.

Referring to the CVP analysis, Enyi (2019) compared the event of the weighted contribution margin (WCM) and the reversed contribution margin ratio (RCMR). The result showed that WCM lacked analytical efficiency and generates suboptimal products mix because it ignored the inverse relationship betwixt a product'south contribution margin ratio (CMR) and its suspension-even point (BEP). The paper suggested the utilize of the RCMR with the effects of the CMR/ BEP measurement.

2.2. Studies on CVP Analysis in the Teaching Sector and the Public Sector

The inquiry by Witte and López-Torres (2015) was based on the previous study with inputs, outputs and contextual variables, too as the data sources used in the manufactures to comport the research in the education. The study clearly showed the difference in effectiveness betwixt education and economics. Regarding quantitative enquiry, Upping and Oliver (2012) conducted the survey with 78 financial directors of public universities in Thailand to assess factors affecting the change of accounting information for planning and control purposes. The enquiry showed the bones cistron affecting the information conversion process was the low efficiency due to the lack of engineering resources and the staff had only applied noesis about private enterprises. The study likewise emphasizes the role of the data organisation – including CVP assay – in supporting the operational surround under authorities budget reduction and strengthening financial responsibility in public universities.

Agasisti and Johnes (2010) studied the heterogeneity and the effectiveness evaluation in Italian universities resulting from the rapid change of the college educational activity environment in Europe since the mid-1980s when the Italian authorities transfers financial autonomy to universities. The study had useful information on changes in cost structure and technical efficiency that lead to a decline in profitability in typical universities. Liu, Forgione, and Younis (2012) compared the CVP construction of large urban hospitals with non-profit education activities and minor-profit hospitals without rural teaching activities. The result showed that large, not-profit educational activity hospitals in urban areas had higher fixed costs and lower variable costs, lower revenue and return on avails (ROA). In dissimilarity, non-profit rural hospitals tended to take lower fixed costs, college variable costs, college revenues and higher ROA.

Some authors are interested in the aspect of applying CVP analysis in the education sector and the public sector such as Goddard (2006), Cropper and Melt (2000). These studies use survey methodology to evaluated the application of the CVP analysis to the accounting work of universities and showed the benefits of applying this technology to universities. However, studies indicated that the challenge of using a cost-based operating arrangement is circuitous and expensive, and then the benefits should be weighed against the toll. Goddard (2006), when investigated the human relationship between bookkeeping and new public direction (NPM) at the UK Local Government tried to consider management from the perspective of participants and pointed out the accounting noesis and NPM related to governance and local authorities responsibilities. Cropper and Melt (2000) described the current state of price in college education, reviewed recently-published documents and analyzed organizations' progress in implementing a CVP analysis. The report results found that the implementation of the CVP analysis is deadening and, therefore, it is necessary to increase the pressure of change from donor agencies and central authorities. At the aforementioned time, research results have shown that many universities are non happy with their toll accounting system and are looking to modify them. With the financial resources available to universities becoming increasingly limited, it is necessary to commencement the costs from the revenues of the courses to better manage the source.

The balanced scorecard is an effective management tool. Philbin (2011) points out that developing and applying a balanced scorecard with financial and non-financial measures can improve governance efficiency of governance in universities. From at that place, it will bring intangible benefits to stakeholders such every bit students, faculty, the state and the whole lodge. Research has identified ways to develop balanced scorecard-based reports that include economical and non-economic measures to improve university management performance by providing tangible benefits for stakeholders.

Toidentifybarriersfor universityand industrycooperation, and develop recommendations for the internal ecosystem of technology commercialization, Alibekova, Tleppayev, Medeni, and Ruzanov (2019) conducted a survey of experts. Survey results showed that the main barriers for cooperation between universities and the industry are: lack of resources to build university-industry links, lack of time due to high teaching load, poor qualification of engineering science transfer managers, and incomplete connection with the industry. Based on the results of expert surveys, the study proposes an ecosystem development to commercialize academy-based technologies, in which the following economical activities are important: human resource, finance and intellectual property management system and intermediary infrastructure.

The study by Abdullahi, Bello, Mukhtar, and Musa (2017) on the utilise of the CVP assay as a management tool for decision-making in small businesses of Bayero University, Kano, was conducted on the main database that nerveless by structured questionnaires. The hypotheses were tested by the Mann-Whitney U-test and the Pearson correlation coefficient. The study concluded that modest businesses were less interested in using the CVP assay and other direction accounting tools. Since then, the study besides recommended the use of the CVP analysisin small businesses in general and small businesses in universities in particular to improve productivity.

In the written report of factors affecting the industry and university cooperation in education in the hotel industry in Vietnam, Nguyen & Nguyen (2020) considered that the process factor has the almost positive factor, followed by the contextual gene. The study as well revealed that the benefit factors were significantly associated with educational cooperation, affecting university and manufacture hotel allianecs. Le (2017) considered management accounting as a tool for financial autonomy at public universities, in which, the author proposed classification of variable costs and fixed costs; identify the object of cost drove past training level and training system; appraise the toll fluctuation touch on on the financial operation of the school. The mention of the CVP analysis for short-term conclusion-making is unclear.

Another indirect studies related to finance in public universities. Zulfaris, Mustafa, Mahussin, Alam, and Daud (2020) when studying the relationship between educatee and money direction behavior showed that all financial knowledge and socializing of the parents have a positive relationship with money management; meanwhile, peer influence and cocky-command have a negative relationship with coin direction. The study besides asserts that almost students admit they cannot control themselves in managing their coin and that their parents are playing an essential role in securing their coin management. Sabri, Cook and Gudmunson (2012) when studied about the fiscal well-being of Malaysian college students that show the experiences of childhood consumers such every bit the habit of saving contribute to helping students earn a lot of money (saving money, electric current fiscal situation, financial management skills) and a level of fiscal literacy related to financial well-being.

3. Enquiry Methodology

The study was conducted past sending questionnaires to the finance departments of 138 public universities in Vietnam. There were 55 valid answers from 53 public universities. Due to the depression response charge per unit (40%), the sample size of the study was calculated using the following formula (Nguyen & Nguyen, 2015):

\(\mathrm{ntt}=\mathrm{n}^{*} \mathrm{re}\)

In which:

n is the required sample size

ntt is the minimum sample size in exercise

re is the response charge per unit (%)

According to this formula, the actual sample size required for the study is:

\(\mathrm{ntt}=102 *(55 / 138)=41\)

The number of samples nerveless in this study was 55, which is appropriate for analysis. A full of 55 people participated in this written report, of which people who accept more than than 10 years of piece of work experience accounts for 27%; 49.1% of respondents take from 5 to x years of work experience (20; 36.iv%). Furthermore, 76.iv% of respondents have a postgraduate degree, the remaining accept a university degree. The results of the demographic survey evidence that respondents are suitable subjects to collect relevant data on the management accounting application of public universities.

Regarding the surveyed universities, among 53 universities, xvi are fully democratic, 29 are partially democratic and viii are not autonomous. In terms of age, 25 universities accept operated over l years (accounting for 47.2%), 16 universities accept operated from twenty to 50 years (accounting for xxx.2%), just a small-scale number of universities have operated for less than 20 years. Regarding location, the bulk of universities are located in the Due north (30; 56.6%), the number of universities located in the Central and South are relatively like (xx.8% and 22.6% respectively). Compared to the overall distribution level of 138 Universities (Vu, 2017), universities located in the North accounts for 54%; universities located in the Central and the Southward are xx% and 27% respectively. Thus, the distribution of the sample of 53 universities is appropriate (see Table i).

Table one: Characteristics of Vietnamese public universities

The nerveless information is candy on SPSS 20 software combined with analyzing and comparing the results with statistical secondary data to attain the research objectives. Steps of the enquiry are every bit follows: (i) entering data into excel file, checking the validity of answers, eliminating blank and incomplete answers; (ii) checking and cleaning information; (3) analyzing information on SPSS 20 software with the post-obit tools: Frequency statistics and mean.

4. Research Results

4.1. Regarding Operating Expenses

Cost is an important function of a university's CVP assay. Information technology is assessed on three dimensions: price nomenclature, cost reporting and toll allocation. Through a reasonable cost nomenclature, accountants can provide multi-dimensional information. Through detailed reports on variable costs and fixed costs; controllable costs and uncontrollable costs; cost factors; directly and indirect costs universities, administrators will have an appropriate toll cess and apply information technology in the CVP analysis.

In terms of price classification and tracking of operating costs, universities only runway toll factors such as salaries, scholarships, outside services, etc. (according to the State budget index), with 100% of answers being "Aye". Other classifications include variable costs and fixed costs; direct and indirect costsfor one student; direct and indirect costsfor each department; and controllable and uncontrollable costs which are not emphasized by universities. The percentage of universities that exercise not classify or track these costs is between 43.6% and 63.6%. These are necessary costs in management reports, but non even so implemented.

In terms of cost reporting to administrators, the finance departments of universities simply study the cost factors while other types of costs such every bit variable costs and fixed costs; direct and indirect costs for i student; directly and indirect costs for each section; and controllable and uncontrollable costs are not presented (the percentage of "No" response is between 49.ane% and 72.7%). In particular, reporting of controllable and uncontrollable costs receives the least attention, and the charge per unit of not-implementation is 72.7%. Thus, reports providing useful information to the board of administrators in decision-making are not made regularly past public universities.

General cost allocation is e'er a business organization for accountants when providing advisable cost information for cost-begetting subjects. The more than specific the general cost allocation, the more appropriate the information provided for the management'south decision-making. The actual survey shows that the general cost allocation is prepared flexibly past universities, and each type of cost has its own allocation; for example, the toll of investment in teaching materials can be allocated by the number of faculty members of the department, and training management expenditures are allocated according to the number of students managed past that department. This flexible allotment is popularly applied past approximately 76.4% of universities. Moreover, the cost resource allotment according to the number of students of the entire university accounts for twoscore%. Not many universities allocate costs co-ordinate to the number of students of the courses or the number of staff at the departments; the response rate of "No" of these particular survey items were approximately 67.3% and 81.8%, respectively.

Thus, the cost nomenclature and cost reporting for university administrators' decision-making are conducted past accountants; still, those reports are neither comprehensive nor coordinated. The reports remain simplistic and mainly rail costs factors, while other information for cost command

such as controllable and uncontrollable costs and direct and indirect costs for each section are not prepared or receive the attention of accountants (meet Table 2).

Table 2: Cost Nomenclature, Reporting and Allocation in the Public Universities Vietnam

iv.2. Information for Decision-Making

When asked about the use of the CVP analysis when making decision to choose one of many options, 55/55 academy administratorssaid they consulted the accountants' data. This shows that the board of administrators attributes slap-up importance to the accounting information when making decisions. More detailed data for decision making is shown in Tabular array 3.

Table 3: CVP belittling information for decision making

Notes: S1 (Potent Disagree) and S5 (Potent Agree)

In terms of frequency, most respondents agreed that the finance departments of universities provide information for the lath of administrators' controlling; the percentage of "agree" and "totally agree" were over 60%. It was constitute that 81.8% of respondents used the information to decide the wage of teachers and that nigh 78.two% used the information for making decisions nearly articulation grooming courses. It was besides found that 76.4% used the information for determining tuition fees for short-term training classes. Furthermore, in that location was only a small percentage of respondents who disagreed with using information for decision making (from 0% to iii.6%). For more details, see the comparing that is made in Figure l:

Figure 1: Compare CVP analysis data past frequency and average value

Regarding mean values, all data serving university administrators' decision-making has loftier mean values from 3.62 to iv.04. Information used to make the decision on the unit of measurement price for lecture hours has the highest mean value of 4.04, and it is followed by the mean value for using information for making the decision on joint training (mean value of three.93) and the mean value for using the information to determine tuition fees of short-term courses (three.82). The data that is not used much is the breakeven betoken for each form (mean value of 3.62).

Therefore, in terms of information used for decisionmaking, according to accountants of public universities, the bookkeeping and finance department provides basic information serving equally a basis for the board of administrators; specifically, the section provides information for deciding the wages of teachers, joint training courses, and sizes of repeat classes. Accounting information is a reliable and effective basis for administrators when making decisions related to the opening of brusque-term preparation courses, joint training, repeat classes (the scale and suspension-even pointsthereof), toll per pupil, and the wage of teachers.

4.3. Requirements for the Application of CVP Analysis in Making-Decisions

In order to evaluate the requirements for the awarding of the CVP analysis in public universities in Vietnam, this newspaper evaluates the opinions of the financial department on the necessity of the post-obit contents: (i) preparing cost reports and (2) providing information for decisionmaking. The results from Tabular array iv prove that the finance department said that it is necessary to fix price reports for decision-making (with mean values of three.45 to 4.05), in which making cost reports based on the cost factors had the highest agreement, followed by making reports based on the cost for one student and for each section (unit and faculty), with hateful values of iii.96 and 3.85 respectively.

Table iv: Requirements on toll reporting

Notes: S1 (Strong Disagree) and S5 (Strong Hold)

Regarding frequency (see Figure ane), three types of reports that have the highest level of the agreement are reported by departments and students, by variable and stock-still costs, and by factors (from 47% to 53%). Reporting by factors and by departments had the response of "strongly agree" with rates of 29% and 27% respectively. The reporting by controllable and uncontrollable costs had the lowest rate of understanding, and the response rate for "disagree" was nigh 13%. The necessity of providing data on CVP assay for administrators' decision-making is shown in Effigy ii and Tabular array v.

Figure 2: Cost reporting requirements by frequency and average value

Notes: S1 (Potent Disagree) and S5 (Strong Agree)​​​​​​​

Tabular array v: Requirements for determination making

Notes: S1 (Strong Disagree) and S5 (Strong Agree)​​​​​​​

In terms of mean values (Table 5), respondents agreed on the information provided for administrators' decisionmaking, with mean values ranging from 3.91 to 4.04. The information to achieve the targeted turn a profit was appreciated the nearly (with a mean value of four.04), and the remaining information such as break-fifty-fifty signal and analysis of changes in costs, volume, and profit had similar mean values (3.91 and 3.95). In terms of frequency, all information had a high level of "agree" and "strongly agree", with rates from 69.ane% to 80% (see Figure iii).

Figure 3: Decision-making information requirements by frequency and average​​​​​​​

Notes: S1 (Strong Disagree) and S5 (Strong Concur)​​​​​​​

5. Word and Recommendations

five.1. Give-and-take

The survey on the CVP analysis in public universities in Vietnam shows that universities used information from this assay in making decisions: cost classification and determining break-even point, the number of students, and determining the wage of teachers. The research results are explained as follows:

Regarding costrecognition.

The finance department ofuniversitiestracked costfactors separately, such equally expenses for teachers (salaries, bonuses, allowances, etc.), expenses for students (scholarships, cultural activities, and sports), administrative expenses, expenses for teaching, scientific research, procurement, and the repair of assets. The distribution of general expenses to provide advisable cost data to subjects begetting costs are fabricated based on flexible criteria; appropriately, each blazon of cost has a reasonable allocation. From tracking these types of expenses, the finance department prepares cost reports to provide useful information almost the amount and charge per unit of each type of cost in total costs. In particular, controllable and uncontrollable costs, which are essential in toll control, are monitored improve by totally autonomous universities than other groups of universities, which account for 90% of the studied universities of this paper.

Regarding information from the CVP analysis for decision-making.

According to the survey results, the finance departments provide bones data for administrators, such every bit wages of teachers, joint training, sizes of echo classes, and training costs for each student. Data such equally pause-fifty-fifty points of joint programs and repeat classes are too provided by the finance department to the administrators to make appropriate decisions. This is relevant information for administrators in making decisions. When comparing the degrees of autonomy of the studied universities, all universities are concerned and use CVP information. Specifically, totally autonomous universities are more likely to provide and use such information. This proves that the CVP assay is more than useful to administrators when universities are more autonomous.

Autonomously from sure achievements, the CVP analysis of universities still has limitations. This information tends to more often than not feature fiscal bookkeeping information, reducing the role of providing data to administrators; specifically:

Regarding cost nomenclature of cost reporting.

The cost nomenclature and cost reporting for administrators' controlling are neither comprehensive nor coordinated. The finance department of universities merely tracks cost factors such as salaries, scholarships, outside services, etc. (according to the land budget index). Along with the toll classification, 100% of universities pay not bad attention to the toll reporting by factor. The types of costs needed for management reports, such as variable and stock-still costs; directly and indirect costs for i student or for departments; and controllable and uncontrollable costs are not provided regularly. Totally autonomous universities make these reports at the lowest level (from 24% to 40%) compared to the other two groups. These reports, which provide useful information for administrators in making decisions, are not prepared regularly in public universities. Data on variable costs and stock-still costs serves as a basis for decision making with additional options; direct and indirect costs for each student serve as a basis for determining suspension-even points of grooming courses, training majors, and articulation programs; direct and indirect costs for each department serve as a ground for decision making and price control for each section, faculty, discipline, and campus.

In addition, general cost allocation is always a complicated consequence for direction accounting. Universities classify costs based on flexible criteria. Classification of costs based on the number of students of the entire university accounts for 40%. Notwithstanding, classification of costs based on the number of students enrolled in courses; the nomenclature of costs based on the number of staff working in departments is not used much (from 67.3% to 81.viii%). In summary, the cost classification and making price reporting for administrators' controlling are neither comprehensive nor coordinated. The reports only rails costs factors while other information for cost control such as controllable and uncontrollable costs and direct and indirect costs for each section is not provided nor addressed past accountants.

Regarding information from CVP analysis for decision making.

Universities do not track costs separately for longterm and brusque-term training activities under contracts with campuses and short-term classes nor for each discipline. Therefore, it is difficult to control costs, and there are certain limitations in the provision of information to administrators to make decisions in signing contracts, opening training classes, and determining the number of students of each discipline to attain optimal efficiency. Information related to decision making of curt-term training courses, joint training courses, repeat classes (the size and break-even points thereof), price per student, and wage of teachers are not prepared regularly; in particular, information which is non used often is the suspension-even signal for each class (with the hateful value of three.62).

v.2. Recommendations

v.2.1. Regarding Cost Classification and Cost Reporting

Costs of activities in universities of universities can be divided into types of costs providing direction bookkeeping data such every bit dividing costs into variable costs, and stock-still costs which is the initial footing to implement the awarding of management accounting. Variable costs are understood as the total costs that in terms of value vary according to the level of activities (salaries paid to lecturers, support for students). Fixed costs are costs which do not alter in terms of value within certain capacity such as the depreciation of lecture halls, salaries paid to administrators. Later classifying costs, accountants can provide information about break-even points for each class, course, and bailiwick. Therefore, the newspaper proposes the classification of costs of universities as follows:

Nomenclature of stock-still and variable costs

Fixed costs include depreciation of lecture halls, depreciation costs of machinery and equipment (facilities, cars, didactics equipment), expenses for basic salaries, expenses for hiring security guards and sanitation costs which stock-still periodically. Variable costs include services purchased from exterior electricity, water, lecture halls); wages paid to lecturers; overtime wages paid to lecturers. The fixed toll is characterized past the lecture hall used for various fourth dimension slots that should use the directly-line depreciation rate; and then, the depreciation expense for lecture halls, machinery, and cars will be fixed under certain conditions. This ways that, when the income reaches the interruption-fifty-fifty bespeak, the additional income will merely need to first the variable costs, and the academy volition start to take profits. Therefore, in the annual estimation programme, it is necessary to accept into business relationship the variety of tuition revenues of the organisation by yr, calculating the suspension-even point. If the pause-fifty-fifty income is exceeded, the additional income later subtracting variable expenses should increase with respect to interest

Fixed and variable costs should be tracked separately by department, grade, field of study, and joint program. The more than detailed the level of cost reporting, the more helpful the data will be to calculate the results, such as calculating interest for each joint program, course, and discipline. The bookkeeping section of the schools can runway details receivables for each year, each program, and from scientific research. Afterward subtracting the respective variable costs for each subject (class, grade, discipline, etc.) and dissever fixed costs (if any), the consequence volition be the corresponding interest of each subject every bit a ground for efficiency evaluation of the estimation or implementation.

Classification of straight and indirect costs for each student

The costs for each student include all lecturers' salaries, expenses straight and indirectly related to educational activity. In which, the direct costs are costs direct related to the number of students such equally: Wages for lecturers' lessons, which are determined based on the assignment of the faculty and the corresponding confirmation of lecturers; depreciation expenses of items such as offices, computer rooms, classrooms are adamant by tabular array of allocation and depreciation rates; scholarships are determined based on the list provided by the student affairs department and the specified scholarship amount, and other expenses such as teaching equipment, drinking water are determined by on the specified amount established by the universities. Indirect costs are costs related to many students, which need to be allocated such as: salaries of staff, managers, which are adamant by payroll standards; depreciation of offices are determined based on the allocation and depreciation rates; other expenses are determined based on actual usage. With this classification, the university tin collect information and evaluate the results of each grade, program, and course.

v.2.2. The Application of CVP Analysis in Making Short-Term Decisions

Currently, universities should examine activities from many perspectives to discover the optimal training system. For universities, the cost-volume-profit model tin can assist to determine the minimum number of courses required to offset the costs. This is a useful tool that tin help university administrators to select relevant information in making decisions. It is not only helpful in designing training programs and implementing new strategies, but it likewise helps universities to consider possible risks. The application of the information in making brusque-term decisions can be explained as follows:

Determining interruption-even points for each grade, grade, and subject: the universities should determine details most numbers of students to reach the intermission-fifty-fifty point and required fees to meet break-even points. Then, university administrators can brand decisions about whether to continue certain classes or not. The number of students and required fees to run across interruption-even points are necessary to set targets for each course, class, and discipline and financial targets of the university. The conclusion of break-fifty-fifty points is important to IT and language centers, which provide certificates of competence for students to meet the graduation requirements of the academy. Furthermore, universities take sure centers that help their directors to determine the minimum number of students required for each course. The application of toll-book-profit analysis helps universities to found indicators such as the contribution margin and leverage to evaluate the training activities and create appropriate strategies and implementations thereof.

Determining the cost for each student in each class and year helps university administrators make the right decision well-nigh the preparation scale for each school year. The costs of the educatee training programs should be determined accurately to evaluate the efficiency of each plan (revenues and respective costs). Costs for each program include expenses such equally wages paid to lecturers, general costs (including general administrative costs).

In conclusion, in the context of the autonomy of public universities in Vietnam, the direction required to ameliorate the quality is necessary and contributes to reducing the costs and increasing the acquirement to provide the best services to students. Flexible applications of direction bookkeeping contribute to providing relevant information for administrators in making wise decisions.

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Source: https://www.koreascience.or.kr/article/JAKO202017764018157.page