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A-17, Housing and Food Service Operations, Uniform Cost Accounting System, Classification of Revenue and CostsAugust 20, 1970
SECTION IV - CLASSIFICATION OF REVENUE AND COSTS
A. GENERAL
In order to provide meaningful management information and reports
it is necessary to classify revenue and costs by activity within
each facility and to group functional costs by management
responsibility. Management responsibility is defined as the
separate responsibilities for Household, Food Service, Student
Program, and General Expenses.
As previously defined, a separate set of accounts should be
established for a facility in order to allow management control
and cost analysis. In other words, if a structure is physically
different and is therefore going to have different operating
costs, it should be set up as a separate facility. Also, if
similar structures are separately managed at the facility level
(separate Household and/or Food Managers) they should be set up
as separate facilities. It is not necessary, however, to
establish separate sets of accounts for similar structures under
common management even though they were built under separate bond
series. In order to fulfill annual reporting requirements set
forth in the bond indenture, TOTAL annual revenue and TOTAL annual
costs can be allocated to the separate structures using a
reasonable basis of allocation; e.g., the average occupancy of
each structure. This can be done on a worksheet.
B. CLASSIFICATION OF REVENUE
Intent
The classification of revenue set forth in Exhibit IV - A is
intended to:
* segregate the major types of revenue resulting from the
primary purpose of the housing system; i.e., the day-to-day
housing and feeding of full-time occupants,
* segregate this revenue between regular session and summer
session, and
* provide for the segregation of other significant revenue items
not directly related to the primary purpose of the housing
system.
Additional accounts to meet the particular needs of a campus
may be established at campus option. All revenue account
numbers are to be assigned by the campus.
Based on materiality, forfeits and other income items have
not been segregated between regular and summer sessions and
may be classified as regular session income on the Statement
of Operations. However, if any of these income items are
significant during the summer, the campus Accounting Officer
may elect to establish separate accounts.
Account Definitions
* Room and Board/Room Only - Students: Gross revenue resulting
from the established charge to students for room and
board including basic telephone service. It excludes
all other charges, such as toll calls, damages, deposits,
or social fees.
* Board Only Contracts: Gross revenue resulting from charges
to students or others on a Board Only contract.
* Room & Board, Perquisites: Gross revenue resulting from the
perquisite granted to Head Residents and Assistant
Residents for room and board, including basic telephone
service. It excludes the same type of charges as
described under Room and Board/Room Only - Students.
* Conferences, Rooms: That portion of gross conference income
established as the amount charged for providing room
accommodations and related services.
* Conferences, Meals: That portion of gross conference income
established as the amount charged for providing meals and
related services.
* Catering, and Special Events: Gross revenue resulting from
providing a catering service or other special event.
* Forfeits: Gross revenue resulting from charges to students
for breaking their contracts.
* Vending Machines: Net revenue from vending and other
coin operated machines. (Normally a percentage of
gross receipts.)
* Guest Meals: Gross revenue (net revenue for campuses
employing an outside food service agency) resulting
from paid meals served to guests and University
employees, whether by cash or through a recharge.
* Guest Rooms: Gross revenue resulting from charges
for overnight room accommodations to guests.
* Miscellaneous: Other gross revenue items not significant
enough to warrant separate classification.
EXHIBIT IV - A
REVENUE CLASSIFICATIONS
Statement of Operations Separate Accounts by Facility
Room & Board:
Regular Session Room & Board/Room Only -
Students (includes telephone)
Board Only Contracts
Room & Board - Perquisites
(includes telephone)
Summer Session Room & Board/Room Only -
Students (includes telephone)
Board Only Contracts
Room & Board - Perquisites
(includes telephone)
Conferences, Catering and Conferences - Rooms
Special Events Conferences - Meals
Catering and Special Events
Forfeits Forfeits on Student Contracts
Other Vending Machines
Guest (cash) Meals (includes
meals paid for by employees)
Guest Rooms
Miscellaneous
C. CLASSIFICATION OF COSTS
Account Structure
The adopted account structure provides for classifying and recording
costs at the functional cost level within each facility.
These functional costs will then be allocated to activities on
the Statement of Operations, covered in Section V, Accounting Policies
and Practices.
*Exhibits IV - B and IV - C set forth the mandatory functional
accounts for each facility and for the Residence Hall Administrator's
office. Additional functional accounts to meet the needs
of a particular campus may be assigned by the Chief Accountant
upon written request.
Object Codes
*Specific object codes may be desired when recording raw food costs
(76XX32) and ordinary repairs and maintenance costs (76XX06 and
76XX36). Data Processing currently provides cost reports by
*object code. Therefore, the use of these object codes may
provide a historical record for the detailed analysis of these
costs by facility and in total for all facilities.
Raw Food Costs (76XX32-XXXX-3-81XX)
Meats 8110
Vegetables 8120
Fruits 8130
Milk 8140
Other Dairy Products 8150
Bakery Products 8160
Staples and Other 8170
The last digit of the object code may be used to further detail
costs.
Ordinary Repairs and Maintenance - Household (76XX06-XXXX-3-71XX)
Miscellaneous Supplies 7101
Student Damages 7102
Student Damage Collections 7103
(Others to be established) -
Other object codes will be established by the Chief Accountant for
accounts 76XX06 and 76XX36 upon the request of the Director-Business
Services in the Office of the Vice President - Business &
Finance to generate meaningful historical cost data covering the
cost of maintaining facilities.
Object codes 8001 through 8099 may be used to detail
supplies and expense items in accounts other than the Raw Food
Cost account.
EXHIBIT IV - B
FUNCTIONAL ACCOUNT STRUCTURE
FOR EACH FACILITY
EXAMPLE: Account 76XXO3
76 - Auxiliary Enterprises
XX - Residence Hall Unit Number (Assignment to be made locally
with 01 to 19 block)
03 - Household Cost - Housekeeping
Functional Expense (see note 1) Functional Account Number
HOUSEHOLD COSTS:
Administrative and Clerical X-76XX0l-XXXXX-X
Housekeeping X-76XX03-XXXXX-X
Linen Service X-76XX04-XXXXX-X
Telephone Service X-76XX05-XXXXX-X
Repairs & Maintenance-Ordinary X-76XX06-XXXXX-X
Utilities X-76XX07-XXXXX-X
Miscellaneous X-76XX08-XXXXX-X
FOOD SERVICE COSTS:
Administrative and Clerical X-76XX31-XXXXX-X
Raw Food Cost X-76XX32-XXXXX-X
*Food Preparation, Serving & Clean-up X-76XX33-XXXXX-X
Repairs & Maintenance Ordinary X-76XX36-XXXXX-X
Utilities X-76XX37-XXXXX-X
Miscellaneous X-76XX38-XXXXX-X
STUDENT PROGRAM COST X-76XX40-XXXXX-X
GENERAL EXPENSES:
Central Administration Recharges X-76XX6l-XXXXX-X
Grounds Maintenance X-76XX63-XXXXX-X
Miscellaneous X-76XX64-XXXXX-X
(Other accounts peculiar to Group B Housing)
Other Accounts for Campus Control Purposes
CURRENT OPERATIONS X-76XX80-XXXXX
*PRIOR OPERATIONS - Major Maintenance X-76XX90-XXXXX
Note 1: Additional non-standard functional accounts required by
a campus may be assigned by the Chief Accountant upon
written request.
EXHIBIT IV - C
FUNCTIONAL ACCOUNT STRUCTURE
FOR CENTRAL RESIDENCE HALL ADMINISTRATION
The central administrative account covering the costs of the Residence
Hall Administrator and his staff will be set up using a separate
Residence Hall Unit number in the 01-19 block.
CENTRAL ADMINISTRATION X-76XX70-XXXXX-X
This account may be further detailed at campus option to high-light
significant central administrative costs or to facilitate recharges
to specific facilities or activities. Account numbers will be
assigned by the Chief Accountant upon written request. Assignments
will be made from the 70 block of functional account numbers.
Examples of optional- detail
Cashiering X-76XX71
Accounting X-76XX72
Conference Coordinator X-76XX73
(could include any recharges for campuswide
services not directly chargeable to
specific residence halls)
Definitions of Functional Accounts
HOUSEHOLD ACCOUNTS
* Administrative and Clerical (76XX01): All costs associated
with the operation of a Household (Residence Hall) Manager
and his office staff. Typical costs are: salaries of
the manager, secretary, clerks, and receptionist; and office
supplies. NOTE: Based on materiality, all household
telephone cost may be charged to this functional account.
* Housekeeping (76XX03): All costs associated with custodial
and housekeeping duties in non-food service areas of the
facility. Typical costs are: salaries and wages of
maids and custodians; supplies, such as cleaning supplies,
wax, light bulbs, and paper supplies; and outside services.,
such as window cleaning, furniture and drapery cleaning.
* Linen Service (76XX04): All cost associated with providing
and laundering bed linens and related items. Typical costs
are: purchases of sheets, pillows, pillow cases, blankets,
bedspreads, towels, wash cloths, mattresses and pads;
related laundry or cleaning cost; and salaries and wages of
linen service attendants.
* Telephone Service (76XX05): All costs associated with
providing telephone service for occupants of the facility.
Typical costs are: wages of residence hall switchboard
operators; allocated costs from the campus central telephone
cost center for the switchboard; and the basic charge for
each instrument in the rooms. NOTE: Charges for message
units, toll calls and other if " extra" telephone costs incurred
on behalf of specific occupants are to be charged to this
functional account and collections from the occupant
credited to this account.
* Repairs & Maintenance, Ordinary (76XX06): All costs of a
repair and maintenance nature in non-food service areas of
the facility which have not been designated as chargeable to
*major maintenance reserves.
All repair work performed by outside contractors or the
Physical Plant Department resulting from student
damages, regardless of the type of repair or whether in
household or food service, is to be charged to this
account, using object code 7102. All collections for
damages are to be credited to this account using object
code 7103.
Typical costs are: salaries of maintenance men on the housing
system payroll performing routine maintenance work;
miscellaneous supplies used by these men (charge to object
code 7101); and work performed by the Physical Plant
Department or outside contractors (charge to appropriate
object code).
* Utilities (76XX07): All costs associated with providing utilities
to non-food service areas of the facility. Typical
costs are: electricity, gas, steam, water, sewage and
refuse disposal.
* Miscellaneous (76XX08): Any minor non-food service area costs
not properly chargeable to other household functional
accounts. NOTE: Expenditures made specifically for
conferences should be charged to this account to facilitate
allocation of costs.
FOOD SERVICE ACCOUNTS
* Administrative & Clerical (76XX31): All costs associated with
the operation of a Food Service Manager and his office staff.
Typical costs are: salaries of the manager, assistant
managers, and clerical staff; and office supplies. NOTE:
Based on materiality, all costs relating to telephones in
the food service area may be charged to this functional
account.
* Raw Food Cost (76XX32): This account is to be charged with the
*invoice price of food purchases (edibles only).
* Food Preparation, Serving, and Clean-up (76XX33): All costs
associated with the receiving, storing, preparation, and
serving of food and clean-up in the food service area.
Typical expenses are: salaries and wages of storekeeper,
cooks, cook's helper, bakers, and others preparing food
for consumption; supplies and expenses such as pots and pans,
storage bins, insect control costs. Also, salaries and
wages of the cashier, serving line personnel, busboys, and
dishwashers; and supplies and expenses such as dishes, glassware,
silverware, trays, other serving implements, soap,
mops, and other cleaning or custodial supplies. NOTE:
Campuses using outside food service agencies should charge
contract payments to this account.
* Repairs & Maintenance, Ordinary (76XX36): All costs of a repair
and maintenance nature in the food service areas of the facility
which have not been preestablished as chargeable to major
*maintenance reserves. NOTE: Based on materiality, student damage
repair costs and collections are to be handled through the
household repairs and maintenance account (76XXO6) and "in
house" maintenance supplies may be charged to the household
account.
Except for "in house" maintenance supplies, typical expense items
would be the same as for household.
* Utilities (76XX37) and Miscellaneous (76XX38): Same items as
stated for household except that they apply to the food service
area. NOTE: Special non-food expenditures for conferences.,
catering, or other special events should be charged to
Miscellaneous to facilitate the allocation of costs.
STUDENT PROGRAM ACCOUNT
* Student Program Expense (76XX40): All incremental costs
associated with the program relating to the social and
cultural development of students residing in the
facility. These costs primarily involve those relating
to "residents" and to special student program events.
* The intent is to charge this account only with expenses above
those incurred in treating students and "residents" as
day-to-day occupants of the facility.
* The primary expense to be charged is the salaries (perquisite
value and cash) paid to "residents" from residence hall
funds. Other expenditures for special programs should be
viewed in terms of whether or not the expense would have
been incurred if the special program had not been held.
* Example: If students attend a special dinner to hear a group
of faculty members speak, the students' dinners should not
be charged to Student Program Expense, but the faculty
members' dinners (if not paid for from other funds) should
be so charged, along with any other incremental costs that
would not otherwise have been incurred.
* Example: The cost of cleaning Head Residents' and Assistant
Residents' rooms should not be charged to Student Program
Expense.
GENERAL EXPENSES ACCOUNTS
These are expenses originating outside the specific facility and
for practical purposes are not chargeable directly to Household or
Food Service.
* Central Administration Recharges (76XX6l): The recharge to the
facility for costs incurred by the Residence Hall Administrator
and his central staff (the recharge of accounts 76XX70, 71, etc.)
* Grounds Maintenance (76XX63): The charge from the Physical
Plant Department for maintaining the grounds around the
facility.
* Miscellaneous (76XX64): Minor expenses not chargeable to
Household or Food Service.
Additional accounts may be established for other campus services
chargeable to specific facilities but not directly chargeable to
Household or Food Service. However, unless these charges are
material in amount and only apply to specific facilities, they
should be charged to the Residence Hall Administrator's cost
center (76XX70) which is reallocated to all facilities.
Additional accounts may also be established for costs chargeable
directly to Group B facilities but not chargeable directly to
Group A facilities such as interest and major repairs and
maintenance (reserve accrual).
OTHER ACCOUNTS FOR CAMPUS CONTROL PURPOSES
* Current Operations (76XX80): Used to record budgetary entries
for debt service and unallocated budgetary amounts.
* Prior Operations (76XX90): Used to record expenditures not
considered a proper charge against current operations. Such
charges are to be limited to extraordinary maintenance and
*repairs, furniture and equipment replacement, and facility
alterations and improvements.
Costs Benefiting More Than One Functional Area
Functional, or cost center, accounts are for the purpose of
disclosing the cost of a given function or type of service within a
facility. On this basis, all costs relating directly to a
specific function, regardless of sub-account category, should be
charged to that functional account classification. For example,
the cost of a telephone in a student room is to be shown under
Telephone Service, whereas the cost of a similar telephone in an
administrative office is shown under Administrative and Clerical.
In cases where a given expenditure, labor, or supplies and expense
benefits more than one functional cost area, the principle of
materiality of cost should determine whether or not to split the
cost between the functions. For example, if rags used in the
areas of food preparation, serving, and clean-up are sent to the
laundry together, it is doubtful that the cost warrants splitting.
It should be charged to the function that uses the most rags.
Questions of materiality of cost are judgmental and should be
viewed in such terms as total dollar amount over the year and the
relative percentage distortion that may result between functional
accounts.
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