compass point university: how many spring/summer classes should be offered?

Journal of

J. of Acc. Ed. 22 (2004) 345–355

www.elsevier.com/locate/jaccedu

AccountingEducation

Case

Compass Point University: how manyspring/summer classes should be offered?

Sue Ravenscroft *

Department of Accounting, Iowa State University, 2330 Gerdin, Ames, IA 50011, USA

Received 1 May 2004; received in revised form 1 November 2004; accepted 1 November 2004

Abstract

This case poses the issue of marginal costing for a service that occurs regularly, but is not

the primary function of the organization. The setting is a university and the service is courses

offered during spring/summer semesters, a situation familiar to many students. In this case,

students must decide whether spring/summer courses are analogous to a special order or

whether such costs should be considered integral to the institution�s programming. Students

are asked to identify relevant costs and revenues and to devise a decision rule which takes into

consideration the implications of various cost assumptions.

After completing the case students should be able to apply the concepts of incremental rev-

enues and costs in decision-making. They should also be able to justify using incremental cost-

ing in a recurring setting. Students will be able to explain how managerial incentives, in the

form of fixed budgets, can interfere with the application of incremental cost and revenue con-

cepts. During class discussion, the broader implications of changing institutional responsibility

reporting and budgeting policies may be raised. This case is suitable for introductory courses

at both graduate and undergraduate levels and in the first upper-division undergraduate

course in managerial accounting.

� 2004 Elsevier Ltd. All rights reserved.

Keywords: Relevant; Costing; Decision-making; Non-profit; Setting

0748-5751/$ - see front matter � 2004 Elsevier Ltd. All rights reserved.

doi:10.1016/j.jaccedu.2004.11.001

* Tel.: +1 515 294 3574; fax: +1 515 294 3525.

E-mail address: [email protected].

mailto:[email protected].

346 S. Ravenscroft / J. of Acc. Ed. 22 (2004) 345–355

1. Introduction

Compass Point University (CPU) is a comprehensive public university that offers

many masters and professional degrees, and one doctoral degree. The university be-

gan as a teaching college and still graduates the largest number of teachers of anyschool in the country. CPU is located in a small city within a large metropolitan area.

About 80% of the students are commuters, most of whom work at least part-time.

Several other colleges and universities are located within a 40-mile radius.

CPU�s academic year consists of a fall semester (September–December), a winter

semester (January–April), and two half-semesters of six weeks each, designated as

spring and summer. The spring/summer half-semesters are normally when many stu-

dents take courses at CPU. Part-time students and non-traditional students often

base their programs on the assumption that they will be taking classes year-round.Because the spring/summer courses are offered on an accelerated basis, students�course loads are, of necessity, considerably lower than during the regular academic

year. Nonetheless, spring/summer courses are extremely important because some

students use this time to take pre-requisites for courses they will be taking in the fall.

Alternatively, some students delay taking their last required course before gradua-

tion until spring or summer when they can concentrate on that single course.

Because CPU is a major training institution for teachers, the University has

historically offered many short courses during the spring/summer terms aimed specif-ically at teachers and timed to accommodate their work schedules. The ratio of tui-

tion dollars received by the university in a fall or winter semester compared to dollars

received in a spring or summer half-semester is approximately seven to one.

Although the demand for spring/summer courses has slowly but consistently been

increasing, students often find that the offerings are rather slim and many classes are

filled. Over the last several years there have been instances where the demand for

courses, as evidenced by the student sign-up sheets maintained in academic depart-

ment offices, was very high, yet the department heads were not able to add additionalsections. This occurred because of the budgeting policies surrounding spring/summer

course offerings at CPU.

Academic departments operate as cost centers. Department heads, who assign fac-

ulty to courses, are held responsible for keeping departmental operating costs low.

The University pays faculty 10% of their academic year salary for teaching a

spring/summer course. Salary and the associated fringe benefits are the cost that ap-

pears on a department head�s budget when spring or summer courses are offered. The

amount of the budget for spring/summer teaching is allocated to colleges by the Uni-versity administration. The administration has not shared with faculty its formula for

arriving at the budget amount; but the amount seems to increase slowly each year,

unless demand in a particular college is down one year, and then the funding is de-

creased. The tentative spring/summer course schedules are monitored rather closely

during pre-registration in an effort to keep costs low by canceling under-enrolled

classes.

Full-time CPU faculty members are paid for the academic year, which includes

fall and winter semesters. Faculty members earn extra pay when they teach in the

S. Ravenscroft / J. of Acc. Ed. 22 (2004) 345–355 347

spring or summer terms, as noted above. Many CPU faculty desire spring/summer

teaching because it provides the opportunity to earn extra pay. Often while recruiting

new faculty, department heads treat spring/summer pay as an additional perquisite.

If, however, departmental faculty are unavailable for spring or summer courses, then

department heads are allowed to hire temporary (adjunct) faculty, usually for abouthalf the cost of regular full-time permanent faculty.

When students went to faculty in the College of Business complaining that courses

were not offered even when demand for them was quite high, the faculty considered

the decision to offer a spring/summer course an excellent area for applying the con-

cept of marginal costing. The faculty learned that department heads were unable to

add sections even when twenty or more students had signed a waiting list because

adding a course would cause costs to overrun the budget. The faculty then went

to the administration to urge that the fixed cost budgets be overridden so that addi-tional spring/summer courses could be added on a marginal cost recovery basis. If

the marginal revenue for a course equals or is greater than marginal cost, then the

course could be taught during the spring/summer half-semesters. The administration

responded that the definition of ‘‘marginal cost’’ relied upon by the faculty was

incorrect and needed to be clarified.

The non-teaching staff, which includes secretaries, grounds and maintenance

workers, and administrators, is hired on a 12-month basis and work through the

spring/summer terms whether or not classes are being offered. Because of the 12-month contracts, the administration believes that marginal costs of spring/summer

should include one-third of the costs of operating and maintaining the extensive

physical plant of the university, one-third of the cost of all non-teaching staff, and

one-third of all other costs the University incurs while educating students. The

administration�s reasoning is based on the fact that spring/summer semesters span

the four months of May through August, or one-third of the calendar year.

2. Required

1. Identify the overall goals and objectives CPU likely has for offering spring/sum-

mer courses.

2. (a) Identify CPU�s costs and revenues related to offering courses to students.

(b) Indicate which of the costs and revenues identified in part (a) are marginal or

incremental of the spring/summer offerings; i.e. which costs and revenues are

affected when an additional course or an additional section of a course isadded during the spring/summer semester?

3. Evaluate the administration�s statement that one third of the costs of maintaining

the university�s physical plant and labor costs of the non-teaching staff should be

charged to spring/summer classes. As a public university, CPU also receives a sig-

nificant appropriation from the state. Should the administration consider one

third of the state�s appropriation as revenue related to the spring/summer courses?

Explain why or why not.


4. What are the likely consequences if the administration were to change its policy

entirely and say that there would be NO pre-determined spring/summer teaching

budget and that ALL spring/summer courses must be offered on a marginal cost

recovery basis? Would students be better or worse off? Why?

5. Which goals and objectives are being well served by the current system? Whatproblems does the current system create? Propose a policy for determining the

number of spring/summer courses and justify it in terms of incentives for the

department heads, service to students, and the University�s budget.

(If you prefer using computations in answering the questions, please assume that

the average faculty annual remuneration is $60,000 and that the average tuition per

credit hour is $125 for undergraduate students and $175 for graduate students.)

3. Teaching notes

This case has been used in three graduate classes, an MBA short survey of man-

agerial and financial accounting, a full-semester MBA introductory managerial

accounting course, and a capstone course in an MSA program. It has also been used

in the standard junior-level managerial/cost accounting course, and could be used in

a principles-level course. Students found this case interesting because they have facedlimited spring/summer offerings and the scheduling problems that poses for them.

This case offers students a chance to see the same principles discussed in the non-

routine decision-making chapters applied to a service with which they are familiar.

This case is purely narrative and is easy to read, so it can be distributed in class for

groups to work on together in preparation for class discussion during the same

period. This approach has been successfully used in a once-weekly course that meets

for 2 h and 40 min. However, the case can also be used as a take-home exercise that

students turn in or come to class prepared to discuss. Students� comments during thecase discussion could provide a partial basis for grading participation. If the case

were given as a written assignment, then the grading would be done, as most cases

are, on completeness and clarity of responses.

The faculty member�s board work during discussion is fairly straightforward. The

questions ask for lists of items or for arguments pro and con. Faculty could list all

the items generated by students or only those they consider valid. The first approach

offers a sense of participation to students, but requires some clarification and sum-

marizing at the end. The second approach offers students a cleaner set of notes,but requires more screening of acceptable answers as students are generating them.

Since this case is relatively short, listing all suggestions would not consume an undue

amount of class time. The instructor could have prepared a list in advance and

distribute it to students at the end of the discussion.

The ‘‘actual’’ numbers are produced at the end of the teaching note. These num-

bers were taken from a report issued by a faculty budget committee at the school on

which CPU is modeled. The report provides the incremental costs and revenues of

spring/summer courses over several years. The report was, in fact, issued to influence


the scheduling of courses. An unintended consequence was that it affected negotia-

tions between the faculty union and the administration because the administration

could no longer argue that spring/summer courses caused economic losses to the uni-

versity. However, this issue is not directly relevant to the case. These numbers should

be passed out as the discussion is winding down, rather than early in the discussion,because students should not base their reasoning on the faculty report or be dis-

tracted by how the faculty used the information they gathered.

Upon seeing the actual figures, at least one student in each class has suggested

that perhaps universities ought to consider differential pricing, with spring/summer

courses priced lower because overall demand is lower at this time of year, and many

other schools compete by offering short courses at desirable vacation locations dur-

ing the spring/summer season. The discussion of that issue, which students tend to

support enthusiastically, can lead to issues of pricing in general, differentiatedproduct pricing, and to discussions about whether state-supported educational insti-

tutions are supposed to profit from students. The use of some courses to cross-

subsidize other course offerings could also be discussed. Faculty can point out that

public universities usually have a mandate to educate a broad public group and do

not have the option of specializing only in profitable disciplines, which private

institutions can do, so cross-subsidization is not necessarily sub-optimal.

A footnote to the actual numbers – until 1994, the amount received for teaching a

spring or summer course was 11% of a faculty member�s regular salary. The CPUadministration claimed that spring/summer half-semesters were a loss to the univer-

sity and negotiated with the faculty to reduce their pay per course to 10%. A report

prepared by a faculty budget committee demonstrated that, on a marginal basis,

spring/summer was not generating losses and that the spring/summer surplus grew

substantially when faculty pay was decreased. As a result of this report, which

was first issued in spring of 1995 and has been updated annually since, pay for

spring/summer was not on the negotiating table when the three-year contract was

up for renewal in 1996.

4. Suggested responses and possible avenues of discussion

1. Students will probably give several reasons universities offer courses during the

spring/summer semesters, including the possibility that the university is trying to

accommodate the schedules of students who work full-time and cannot take courses

during their working year. This reason addresses the mission of a public university toserve the students of that region or state. Another reason might be that the university

is hoping that it might attract students who take summer classes to transfer and be-

come fully enrolled at CPU. This reason is based on marketing and is probably not a

primary motivation for CPU. Offering spring/summer courses could also allow CPU

to satisfy demand that cannot be met during the year when all space is fully utilized,

and allows the university to satisfy demand without having to make investments in

increased capacity or infrastructure. In a similar vein, students might say that since

the university resources are there and are not fully used during the summer, this


would appear to be a low-cost alternative, or even a way to use resources without

incurring additional capacity costs. The latter reason suggests that students are

thinking about some costs being committed or sunk, and could serve as a lead-in

to the second question.

2. (a) General costs of educating students include faculty salaries, support staffsalaries, administrative salaries, repair and maintenance, insurance, legal fees, utili-

ties and power, grounds-keeping, depreciation, computers, supplies, furniture, office

supplies, and others. Students may instead list the same costs by function, saying, for

instance, the costs of providing instruction, counseling to students, housing, library,

university administration, and upkeep. Students may mention the cost of publicity

and preparing catalogues and course schedules, maintaining university web sites,

and alumni relations.

Revenues come from tuition and other fees charged to students, from state appro-priations, Federal grants, donations, general purpose grants, housing fees, research

grants, user fees for some programs (e.g. sports training camps), and profit sharing

with bookstores or other lessees of university space. While universities may have

other sources of revenues, these are the primary ones for public universities.

(b) When this question is re-framed to ask students to focus only on marginal rev-

enues and marginal costs, the faculty member can ask students to identify those costs

and revenues that change when a single section is added. Students may be a little

puzzled by this question at first, so they may need to be reminded to think of themost obvious incremental costs and revenues, because in this case, the most obvious

are also the most significant – revenues are tuition and fees, while costs are faculty

salary and benefits.

Although marginal revenues consist primarily of tuition, some institutions may

charge a course fee, a registration fee, or other special fees. All of these represent rev-

enues to the university that would not have existed had students not enrolled in the

spring or summer course.

Marginal costs consist primarily of faculty members� salary and benefits. Fringebenefits are significant and students may be surprised to learn that they are over

20% of salary costs. The case notes that clerical, maintenance, and housekeeping staff

are all hired on a 12-month basis, so there are few marginal costs in these areas. The

costs of supporting the registration process and the paperwork involved will proba-

bly be noted by students. I find that when I ask students how substantial such costs

would be, students usually tend to estimate them as being rather low. If part-time or

temporary staff are hired to help with registration, those costs should be included.

Students might suggest that a portion of printing costs for having a separate springand summer schedule should be included and allocated to each course offered during

the two half-semesters. Such costs are likely to be trivial, however; once the decision

is made to hold any classes during spring or summer semesters, a schedule has to be

prepared for each semester and the printing costs vary more with the number printed

than with the number of courses offered. Utilities could also be included, but some

students will likely note that this is a very small cost. The buildings are already being

kept air-conditioned because of the office and administrative staff being there during

the spring and summer.


3. The third question gets at the heart of defining marginal revenues and costs.

Should these revenues and costs be considered marginal if they relate to a sub-

stantial service that is offered every year and is, to some extent, part of the basic

set of offerings of the institution? This would be a good time to review the ways

that costs are distinguished for various purposes. For long-term planning, costsare generally classified as fixed or variable, and possibly some variation of fixed

such as step fixed; this classification serves as the basis for planning and control

and enables cost–volume-profit analyses. For evaluating performance, we rely on

the distinction between costs which a manager can control or has discretion over

and costs over which a manager does not exert control. Finally, for this case, the

relevant purpose is decision-making – how to decide whether or not to offer a

spring/summer course. For that type of decision the distinction is between costs

that are relevant and costs that are not. Relevant costs are also known as incre-mental or marginal costs; i.e. they change as one�s decision changes. Costs which

are irrelevant include sunk costs; i.e. costs that have already been incurred, and

future committed costs, the level of which will not change with the decision to of-

fer one additional spring/summer course. Allocated costs are also irrelevant be-

cause the total amount remains constant regardless of the allocation.

The faculty argued that instead of holding the department heads responsible for

meeting a fixed budget for spring/summer semesters and evaluating their perfor-

mance by how well they meet the fixed budget, the university should allow depart-ment heads to rely instead on the relevant-irrelevant distinction and offer

additional courses when the relevant revenues exceed the relevant costs. The CPU

administration responded to the faculty suggestion by stating that the real cost of

the spring/summer half-semesters should include an allocation of one-third of the

salaries of non-teaching staff and maintenance and physical plant costs. Students

should be urged to consider arguments on both sides of the issue. Such arguments

may include the following points:

Arguments for excluding non-teaching staff and infrastructure costs could includethe following:

� Support, maintenance, cleaning, grounds, and building staff are already hired on a

12-month basis.

� If CPU were to switch to eight-month contracts with at least some of those peo-

ple, they might have to pay a higher hourly rate as an inducement for people to

take permanent jobs that are, in fact, not full-time.

� The administration has not made an effort to use the university as fully duringspring/summer as it is used during fall and winter.

� Costs such as plant, maintenance, and full-time staff are committed costs incurred

because of fall and winter activities.

� At this time, CPU is not perceived by its employees or by students as a full-

service year-round institution, because both course offerings and support ser-

vices are reduced during spring/summer. For instance, the library and com-

puter center are open fewer hours, and office staff are allowed to use flex-

time.


CPU�s primary focus is on fall and winter semesters. If administrators argue that

one-third the costs should be allocated to spring/summer, then consistency requires

that they also allocate one-third the state appropriation (the total is approximately$110 million) to the spring/summer semesters as well. From the students� point ofview, fall and winter are the primary semesters for taking courses. The amount of

tuition revenue in fall or winter averages $24,000,000 per semester versus just over

$7,000,000 for both spring and summer combined. Thus, spring/summer tuition is

about 13% of annual tuition, which is, in turn, approximately 35% of all university

revenues ($55 million of $110 total budget).

One could argue in favor of allocating one-third of university costs to the spring

and summer semesters by noting that the university�s mission is to provide educa-tion to eligible students at an affordable rate. It does this throughout the year; the

timing of the service is less significant than the fact that this service is the univer-

sity�s primary activity. Furthermore, offering courses should not be considered as

an ancillary activity; these courses are not offered on a one-time basis. If the

spring/summer schedule were discontinued some identifiable costs would be elimi-

nated or reduced. For instance, a few buildings could be closed and staff could be

laid off each summer. Keeping buildings open incurs utility and maintenance costs.

Because it is considered an obligation of the university to offer courses during thespring/summer, the costs of maintaining the university for that third of the year

should be allocated to the services offered during that third of the year, just as

is done for fall and winter.

Allocating one-third of the cost to the university might motivate people at the uni-

versity to think of additional uses of facilities during spring/summer that would gen-

erate more revenues to offset that cost allocation. Finally, some schools may use

spring/summer course scheduling as a way to accommodate regular school year

demand that exceeds capacity. Rather than incur the costs needed to add classroomsor other infrastructure, schools may schedule additional courses in the spring/

summer semesters.

4. Some students would be adversely affected if all spring/summer courses were

offered on a marginal cost recovery basis. Students in specialized programs or in

upper-level courses (where enrollment levels can be low) are most at risk of having

courses dropped from spring/summer schedules. Given the high percentage of

part-time students at CPU, this possible disruption imposes a real cost; some stu-

dents� education may extend several years because of difficulties in schedulingsequential courses. Students could choose to attend one of the other universities

and colleges within driving distance and, possibly, transfer there permanently.

CPU currently serves students who return to the metropolitan area for the summer

but attend other universities during the regular academic year. Tuition from these

visiting students, who typically impose few demands on the university (in terms of

health services, counseling, etc.), would be lost.

Department heads often treat spring/summer teaching as part of compensation

packages when recruiting faculty. Many faculty rely on the spring/summer supple-ment to their salaries. If spring/summer courses were discontinued, those faculty

could experience some financial stress. This system would introduce more uncer-


tainty to students and faculty because scheduling would be contingent on demand,

so courses could be added up to the first day of classes. This would impose a heavy

burden on department heads and would significantly reduce the predictability

inherent in the current system. Qualified faculty may not be available on such short

notice.Students could possibly begin to ‘‘game’’ the system. They could decide to help

each other get necessary or desired courses by signing up and then withdrawing with-

in the first week. To avoid this possibility, the university might impose draconian

withdrawal fees, a move that would probably be perceived as hostile by the students.

Again, this is a very negative consequence from a marketing point of view.

5. Under the current system, department heads are considered managers of cost

centers, yet they, and to some extent, their faculty, are held responsible when enroll-

ments decline. In terms of responsibility accounting, the current system sends a rathermixed message. Department heads are responsible for keeping costs down AND for

increasing enrollments. But doing the former often entails not doing the latter. Some

obvious ways to reduce costs would be to offer fewer courses, hire more adjuncts, and

have fewer but larger classes, thus reducing service to students. For those faculty who

rely on teaching spring/summer, the effect would be to lower their annual pay.

The current top–down system of determining the spring/summer budget (which

indirectly determines the number of courses a department can offer) places a high

emphasis on predictability. The provost, the administration person in charge of bud-gets, can fairly accurately predict the expenses for spring/summer. The shortage of

offerings encourages early enrollments because students want to be sure to have a

place in the class of their choice. Consequently, the provost can rather accurately

predict revenues, which makes the current system very good for planning purposes.

The current system is also fairly easy to administer. There are not many contingent

course offerings, i.e. courses added as student demand dictates. This, in some ways,

makes a department head�s job easier, as he or she is not scrambling at the last minute

to find faculty (full-time or adjunct) to cover the additional sections. The departmenthead is also better able to predict the costs of the spring/summer schedule. The current

system, given the low number of changes, also means that the published course

schedule is relatively reliable and there is less paperwork in a variety of offices.

The failings of the current system tend to relate more to marketing and to longer-

range concerns of the university. The current system fails to respond to student

needs. Given the competition in higher education, being unresponsive can be very

harmful in both the short-run and the long-run. Students cannot be certain of which

courses will be added, so their schedules are affected adversely. The current system,while making it easy in some ways for the department heads, is also frustrating for

them because they cannot act on their knowledge of student demand.

Budgeting for spring/summer should probably be done on a combined top–down/

bottom–up basis, using the knowledge and goals of all parties concerned. The

department heads are currently in an untenable situation. They are held responsible

for meeting a fixed budget, but not given credit for revenues generated with tuition

or fees. The best way to reduce costs is to offer no courses, so the incentives motivate

department heads in non-optimal ways. The administration could clarify its goals


and long-run strategy by sharing the basis for their FTEF allocation with depart-

ment heads.

In my classroom experience with this case, I have found students to be creative in

proposing alternatives. I require that any proposal be discussed in terms of its

strengths and weaknesses and likely implications for students. The most frequentproposal from students is that additional courses beyond those currently offered

could be scheduled on a marginal cost recovery basis. This would allow department

heads to use their knowledge of student demand, to be responsive to students, and to

exercise their judgment over which courses generate greatest demand during spring/

summer. Department heads are most likely to know which spring/summer course

offerings might simply cannibalize the fall or winter schedules. Control by university

administration would be fairly simple to exercise. Beyond a certain number of

courses, defined by the base budget, actual revenues and costs could be easily com-pared to see if department heads had appropriately determined course offerings.

Such a plan also forces the department heads to think carefully about which faculty

will staff spring/summer courses, as the salaries vary widely and thus, the required

enrollments also vary widely. Are the best paid faculty likely to attract the necessary

number of students to recover the costs? If not, how can department heads staff other

courses so as to guarantee marginal revenues will exceed marginal costs?

As always, performance criteria must be considered carefully since some criteria

could sub-optimize the overall goals of a department or university. For instance,average class size would have to be monitored for consistency over time. This would

guard against department heads converting classes that formerly were taught in med-

ium-sized sections (20–40 students) to mass lectures in order to reduce the cost of

faculty pay. And to guard against departments offering many spring/summer classes

in order to increase their faculty salaries (the extra 10% salary per course), the

departments would have to be monitored to ensure that fall and winter offerings

did not decrease because students were taking courses during spring/summer. The

benefit to students in such a program is quite clear and could have long-term positiveeffects on the reputation of the university as a student-friendly organization. It might

also increase the revenues from students enrolled at other universities who attend

Compass Point University only during spring/summer.

In the long run, the university could consider moving to a year-round calendar.

The University could decide to take a less hands-on approach in the short-run

and give three to five year productivity and cost effectiveness measures to depart-

ments and colleges, and delegate more responsibility for decision management down-

ward. Another approach that could be taken is to call for a serious study of whatcosts could be reduced if the University were to close facilities during the spring/sum-

mer semesters and to study the marketing impact of such closures on enrollments.

Compass Point State University, Faculty Council Report, Comparison of marginal

revenue and expenditures spring/summer 1993–1999

In this report, we include only marginal revenues and expenditures directly attrib-utable to instruction. Tuition, the only revenue, has been reduced by 1% to allow for


bad debt. No portion of the state�s appropriation to the University or of student

registration fees is included in the revenue. The only expenditure is faculty salaries

and benefits paid to tenure-track faculty and adjunct lecturers hired to teach courses

during spring/summer. In the table below dollars are presented in thousands.

1999
1998 1997 1996 1995 1994 1993
Spring

Tuition revenue – 1% bad debt
4293 4489 4350 4301 4143 4029 3827
Faculty salary and benefits
3297 3346 3295 3377 3235 3201 3365
Spring excess
996 1143 1055 924 908 828 462
Summer

Tuition revenue – 1% bad debt
2076 2161 2198 2181 2143 1931 1750
Faculty salary and benefits
1454 1444 1365 1561 1509 1364 1482
Summer excess
622 717 832 620 635 592 379
Total excess rev. over expenses
1618 1860 1887 1544 1543 1420 841
Compass Point State University, Faculty Council Report, General fees revenues spring/

summer 1999–1995

As the faculty council looked more closely into the issues of spring/summer costs

and revenues, they realized that General Fees can be substantial, so from 1995 theyadded this revenue source to their annual report. The general fees are listed below,

given in thousands, and are for both spring and summer combined. Since students

were told nothing about these fees in the case, the numbers are not included in

the chart above. The general fee revenues increase any marginal economic benefit

of spring/summer courses to the University.

1999
1998 1997 1996 1995
General fee revenue – 1% for bad debt
827 812 759 745 764

compass point university: how many spring/summer classes should be offered?

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