The Business School at Ivy State University: Cost Behaviors

5 Pages Posted: 30 May 2017

See all articles by Mark E. Haskins

Mark E. Haskins

University of Virginia - Darden School of Business

Abstract

Some potentially painful cost reductions will have to be made at the Ivy State University Business School, so the business manager has been asked to develop a list of initial cost cuts. To visualize how the budget's major line-item costs have behaved, he uses a set of graphs to understand and be able communicate to the directors of the various operating units what resources or activities need to be curtailed in order to reap the largest financial cost savings.

Excerpt

UVA-C-2346

Sept. 18, 2013

THE BUSINESS SCHOOL AT IVY STATE UNIVERSITY: COST BEHAVIORS

The financial vice was tightening on the administration at the Ivy State University Business School (ISUBS). The state legislature had announced significant subsidy cuts, alumni were not making financial contributions at the same level as in prior years, and corporate donors were dispensing fewer dollars in a more restricted fashion. ISUBS's budgeting process for the coming year had begun, and it appeared to Janice McAlister, vice president of finance, that it was not going to be a pleasant one. Unless revenues increased from an unforeseen source, potentially painful cost reductions would have to be made. Indeed, McAlister had just instructed Jerry Franklin, the school's business manager, to develop a list of initial cost cuts.

Jerry Franklin

Franklin's financial background was not extensive. He had graduated from ISUBS four years earlier, and his story was the proverbial “in the right place at the right time” one. After graduation, he and his wife decided not to relocate because she had a great nursing job in a local doctor's office. So he scoured the area looking for a position and was fortunate to find an entry-level management position in the back-office operations department of a local bank.

. . .

Keywords: Cost behavior, cost cuts, cost reductions, line-item costs, graphs

Suggested Citation

Haskins, Mark E., The Business School at Ivy State University: Cost Behaviors. Darden Case No. UVA-C-2346, Available at SSRN: https://ssrn.com/abstract=2974052

Mark E. Haskins (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924 -4826 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/haskins.htm

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
2
Abstract Views
273
PlumX Metrics