The Continuing Education Program Provider (CEPP) was initially created as a part of a state university’s outreach and extension service for agriculture related education program. Over the years, CEPP has evolved into a non-credit continuing education and lifelong learning program provider. The leadership for CEPP is appointed on part-time basis and changes frequently. To accommodate for the rapid expansion, each leader established new programs with varying cost and profit sharing agreements, and different terms and conditions with different partner. As a result, the operating expenses are absorbed differently and at times by units other of CEPP. Despite knowing the overall year-end revenue, not being able to clearly track the costs incurred, and not knowing if the organization itself (CEPP) is self-sustainable.
The recently appointed new leadership team needs to have a better understanding of the current state of the organization and the self-sufficiency of the programs offered by CEPP. The objective of this study is to establish an activity-based costing system for CEPP that would allow CEPP to track the direct labor costs and allocate the indirect costs, clear attribution of revenue, and ultimately calculate the rate of return and breakeven point for each of the program offered.