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Università degli Studi di Padova|
Jefferson High School Case Study|
Management and Performance measurement of Public Organizations| |
Luis Miguel Cunha
Daria Piacun|
08-04-2013|

|

Jefferson High School
Actors:
Mr. King
Mr. Michael Abbott (Director of the fiscal affairs department)

Background:
Los Diablos School System’s was being decentralized and are developing a better cost allocation method to determine true cost per student. The school was facing difficulties in defining the best approach. They developed three different methods increasing the accuracy and truthfulness of the results. However Mr. Abbot remained skeptical to the employment of the system due to being too complicated to be used in all schools and doubted that many principals could take real advantages of the results obtained.

Q1

With the first allocation method, the most simplistic one, the cost for all three students was the same (3,704$) despite all the differences between them, showing then the real strong limitations to this method of full costing.

With the second allocation method, the predictions of the method start differentiating the students and their true costs, firstly we have Larry B. with a predicted cost of 3,550$, secondly we have Michael R. with a cost of 3,523$ and finally Anna B. with an allocated cost of 4,202$.

With the final and most accurate cost allocation method the allocated costs to each student changes to 3414.18$ to Larry B., Michael R. predicted cost is of 3015.11$ and finally Anna B. ends up costing 4939.48$.

These Differences arise from the specificities of each cost system, the most accurate one the Service Based System , fully differentiates the students and the activities they are enrolled, the other two don’t differentiate the activities between students only between grades(grade based system) or all school(school based system) so the differences arise from the degree of thoroughness of each system.

Q2...
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