ABSTRACT

Keywords: Standard student, marginal cost, average cost, fixed cost, variable cost, cost center.

The overall objective of this study is to develop a flexible model to determine the marginal cost of an undergraduate student for each of the various curriculums at Turkish Naval Academy (TNA). Until now, the average cost of an undergraduate student has been calculated. This calculation method accepts all costs as variable costs in the basis of the number of students and distributes them equally over all students. In reality, the contribution of each student to the total costs can be different. The proposed model is developed for four cost centers; “Academic Departments”, “Dining Hall”, “Dormitory” and “Training Fleet”. With the combination of these four cost centers, total costs of TNA are calculated. At the end of this study, the model divides the costs incurred within these four cost centers in to two parts as variable costs and fixed costs. By using variable costs, it also calculates marginal, total fixed, total variable, and average total variable costs of students. By using these data, decision makers can make decisions at minimum cost and have data base that will help them to decide the number of undergraduate students that should enroll at TNA. Profit based education institutions can decide their tuition and see their break-even point by using this model.