University of California Davis Self-Supporting Recharge Operations - Glossary Of Terms
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Administrative Support Costs (Overhead) |
Costs not directly tied to a specific service but are necessary to run the overall operation. These costs are split amongst all services. |
Allowable Costs |
Cost that must be incurred to deliver a service. Allowable costs must be necessary, reasonable, and allocable. |
Base Rate |
What it costs the recharge operation to perform a service. Base Rate = Total Allowable Costs / Estimated Total Volume |
Direct Costs |
Expenses that directly and consistently trace back to the services and rates offered a recharge operation. |
External Customers |
Any individuals or organizations not using university funds to pay for a recharge service. |
External Rate |
The rate a recharge operation charges external customers. The external rate is equal to the base rate plus costs associated with facilities and administrative costs (F&A). External Rate = Base Rate + NUD |
Income |
Fees received from external customers for services performed. |
Institutional Recharge Operation |
A recharge operation that services the entire campus or a large part of it. |
Internal Customers |
Customers that use funds that come through the university. |
Internal Rate |
The rate a recharge operation charges internal customers. The internal rate is equal to the base cost of the service. |
Markup |
An amount that can be added to external rates. Typically used to bring a rate close to market rates. |
Non-University Differential (NUD) |
The amount added to a base rate when calculating external customer rates. This amount covers F&A costs. |
Operating Costs |
The ongoing expenses incurred from running your recharge business, |
Operational Subsidy |
A predetermined sum of money granted by the university, a department, or government to assist a recharge operation that the price of a good or service may remain low or competitive. An operational subsidy covers all internal recharge customers. |
Rate Methodology |
The unit of measurement a recharge operation uses to charge for its services. For example, per hour, per service performed, and flat rates. |
Recharge Operation |
An activity funded by the income it generates from the goods and services it offers. |
Revenue |
Fees received from internal customers for services performed. |
Service Center |
A recharge operation that provides a specific service to a targeted customer base. |
Specialized Service Facilities |
Service a very specific function and typically have support costs and revenue in excess of one million dollars per year. |
User Subsidy |
A predetermined sum of money granted by the university, a department, or government to reduce a rate for an individual, a specific customer group, service, or product line. |