Activity Based Costing Model

Cost Model for Data Management Center (DMC) Main Menu
Introduction
This workbook was developed to assist the Data Management Center (DMC) in gaining better insights behind the cost of opera In order to better understand costs, the following steps were taken to develop this spreadsheet model:
1. Identify all of the resources available to DMC and the associated costs of the resources (personnel, equipment, etc.) 2. Identify all of the major activities of DMC such as setting up IP addresses, installing network equipment, etc. 3. Map a relationship between the resources and activities - referred to as "Resource Drivers" (allocates costs to key activities) 4. Map a relationship between the activities and cost objects - referred to as "Activity Drivers" (allocates activity cost to your ser 5. Determine the costs of each service, product or what-ever you consider your cost object within the model. Since cost data, activities, and other attributes change, this model should be reviewed and updated at least once a year. Data Entry Cell > Tab 1 2 3 4 5 6 7 8 Description Main Menu Overview Resource Pools (Step 1) Activity Costing (Step 2) Activity Drivers (Step 3) Cost Objects (Step 4) Final Report (Step 5) Glossary Purpose
Starting point for using this cost model Some background information on how this model works Identify resource pools and their related costs as a starting point for th Identify and describe the key activities performed by the Data Manage Based on analysis, determine the output metrics for allocating the cos Identify and describe the cost objects that DMC wants to use Report of costs by cost objects Glossary of terms used related to this cost model
Main Menu Overview
Resource Pools Activity Costing
Activity Drivers Cost Objects
Final Report Glossary
etter insights behind the cost of operations.
(personnel, equipment, etc.) work equipment, etc. ers" (allocates costs to key activities) rs" (allocates activity cost to your services) t within the model. updated at least once a year.
n how this model works related costs as a starting point for the model vities performed by the Data Management Center e output metrics for allocating the costs ects that DMC wants to use
o this cost model
Cost Model for Data Management Center (DMC) Overview of Model

Purpose
The purpose of this model is to allocate costs. This model is based on the principle that activities incur costs through the consumption of resources. As end users demand products or services, activities must be performed.
How are Costs Allocated?

The model uses a two step process to allocate costs: Step 1: You have to pull actual costs (what was spent) per the most reliable source, such as the General Ledger. Once you have identified the actual costs, then you have to determine how to allocate all of these costs (resources) to the activities that are performed by the department (or what-ever domain you are building the model to). Labor costs are typically allocated by looking at the percentage of time people spend on various activities. Step 2: Once you understand the costs by activities, then you need to allocate these costs to your cost objects (such as the different service lines you perform for customers). For example, the number of help desk tickets processed is an output driver to allocate costs from the help desk activity to help desk support costs.
How do I use the Model?

The model can help a department understand the following:
What is the true costs of the services we are providing to our customers? How much should we charge customers for the cost of our services? What are low and high priority activities in terms of funding
How do I use the information in this Model?

You want to key-in on what your Activity Costs are and also look at those activities that may not be linked to customers. For example, if you have significant costs for non-value added activities (not close to the customer), then you might want to pursue more lean approaches to incurring these costs. For example, if you are forced to reduce your costs, then you would not want to cut activities very close to the customer. Also, you can express your costs in terms of Unit Costs. This is a common benchmark for reducing your costs over time.
How do I update / maintain the Model?

The following inputs to this model may require updating:
1 Actual Costs for Resources Based on invoices, General Ledger Reports and other sources, the actual costs as of a cut-off period will most likely change. For example, newly awarded contracts, expansion of staffing resources, and installation of new equipment will change the current costs captured for resources on tab 3 of this model. 2 Activities Performed Based on changes in what a department does, the activities on tab 4 may change. For example, if a department discontinues a key service or starts providing a new service, then this model will require updating. 3 Allocation of Resources (Resource Drivers) If resources change or activities change, then you will need to update the resource drivers involved in allocating the costs between the resources and the activities. Additionally, it is a good idea to validate the
current allocations used since people may shift in how much time they spend on an activity. 4 New Activities Require New Drivers and Cost Objects In the event a department begins offering a new service to a customer, this will require re-building the model to include new resource costs, drivers, activities, and cost objects.
What are some rules to follow in building the Model?

1 Link to General Ledger - Where practical, try to obtain and balance your cost data directly with the General Ledger since this is the official system of record for costs.
2 Prioritize the Activities - If the number of activities is greater than ten, you may want to focus on the vital few activitie in order to keep the model simple and manageable. 3 Group Non Traceable Activities - Some activities are difficult to trace back to specific resource pools. May want to group all of these activities together and allocate using a single driver such as direct labor cost.
Main Menu Overview
tivities incur costs through the
as the General Ledger. Once you sts (resources) to the activities that or costs are typically allocated by
to your cost objects (such as the ckets processed is an output
y not be linked to ose to the customer), then ou are forced to reduce an express your
s as of a cut-off period will most likely s, and installation of new
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require re-building the
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pecific resource pools. May want to direct labor cost.
Cost Model for Data Management Center (DMC) Resource Pools

Purpose
The purpose of this worksheet is to identify and capture all of the resources and their associated costs. This represents an imp starting point in allocating costs to activities. This is the baseline for developing the rest of the model.
Instructions
A recommended practice is to determine the total costs of running the department for one full month and break out this costs in resource pools that are linked to specific services or activities. You may have to start by listing all of the personnel assigned to t department and then group them together based on what they do.
Step 1 - Capture the total overall costs for each resource pool
Actual Costs 100,000 125,000 68,500 225,000 78,100 57,100
3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10
Resource Pool Network Engineers Database Administrators Operational Management Service Support / Help Desk Hardware and Equipment External / Indirect Costs
Detail Cost Schedule and General Ledger Reports Detail Cost Schedule and General Ledger Reports Detail Cost Schedule and General Ledger Reports Vendor Invoices and General Ledger Reports Inventory Control Records and General Ledger Re Analysis with Subject Matter Experts
Total Cost Accounted For in this Model Total Cost Incurred for Baseline Period Cost Not Accounted For in this Model
653,700 770,000 -116,300
85% 100% 15%
Step 2 - If possible, try to breakdown the Actual Costs per above into components such as labor, equipment, and indirect cost since each of these components might have to get allocated differently
NOTE: The template below is setup for three components - feel free to modify as needed for a good cost allocation. Actual Direct Labor Costs Resource Pool Costs 3.n.1 100,000 3.1 Network Engineers 100,000 100,000 3.2 Database Administrators 125,000 68,500 3.3 Operational Management 68,500 190,000 3.4 Service Support / Help Desk 225,000 0 3.5 Hardware and Equipment 78,100 0 3.6 External / Indirect Costs 57,100 0 3.7 0 0 0 3.8 0 0 0 3.9 0 0 0 3.10 0 0
Main Menu Overview
ssociated costs. This represents an important of the model.
ne full month and break out this costs into y listing all of the personnel assigned to the
t Schedule and General Ledger Reports t Schedule and General Ledger Reports t Schedule and General Ledger Reports voices and General Ledger Reports Control Records and General Ledger Reports with Subject Matter Experts
Time Frame Jul-07 Jul-07 Jul-07 Jul-07 Jul-07 Jul-07
mponents such as labor, e to get allocated differently

Indirect Costs 3.n.3 0 25,000 0 35,000 8,000 7,000 0 0 0 0 Out of Balance Amount 0 0 0 0 0 0 0 0 0 0 0
ed for a good cost allocation. Equipment 3.n.2 0 0 0 0 70,100 50,100 0 0 0 0
Cost Model for Data Management Center (DMC) Activity Costing

Purpose
The purpose of this worksheet is to allocate your resource pool costs (tab 3) to a list of critical activities performed by the Depa
Instructions
There are two important steps to completing this worksheet:
1 Identify and describe the various activities performed by the resources in the Department. Subject Matter Experts w Department should have a good overall understanding of department activities; such as Setting Up IP Addresses, P Budget Requests, and Installing New Network Connections.
2 In order to allocate resource pool costs to activities, you will need to determine how personnel spend their time. Sur personal interviews are often used to ascertain the proportion of time people spend on various activities.
Step 1 - List Key Activities
Briefly describe the key activities performed by the Department. Try to keep this list to the main activities that are somehow link At the same time, the list should be complete enough to account for most of the resource costs spent each month by the Depar 4.1 4.2 4.3 4.5 4.6 4.7 4.8 4.9 4.10 Installation of Network Connections and Equipment Trouble Shoot Network Connection Problems Database Optimization and Maintenance Data Migration and Integration End User Reports and Programs Strategic and Resource Management of Data
Step 2 - For each activity, allocate the resource pool costs across to each activity
3.1 Network Engineers 3.1.1 100,000 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - - - - - - - - - - - - - > 3.1.2 0 Allocation Allocation 3.1.3 0 Percent Amount Activity Name Allocate 3.1.1 > 25% 25,000 Installation of Network Connections and Equipment Allocate 3.1.2 > 0% 0 Installation of Network Connections and Equipment Allocate 3.1.3 > 0% 0 Installation of Network Connections and Equipment Sub Totals 25,000 The following should balance out to fully allocate your resource costs across all activities: Total Amount Allocated 3.1.1 100,000 Total Percent Allocated 3.1.1 Total Amount Allocated 3.1.2 0 Total Percent Allocated 3.1.2 Total Amount Allocated 3.1.3 0 Total Percent Allocated 3.1.3 3.2 Database Administrators 3.2.1 100,000 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - - - - - - - - - - - - - > 3.2.2 0 Allocation Allocation 3.2.3 25,000 Percent Amount Activity Name Allocate 3.2.1 > 0% 0 Installation of Network Connections and Equipment
0% 0 Installation of Network Connections and Equipment 0% 0 Installation of Network Connections and Equipment Sub Totals 0 The following should balance out to fully allocate your resource costs across all activities: Total Amount Allocated 3.2.1 100,000 Total Percent Allocated 3.2.1 Total Amount Allocated 3.2.2 0 Total Percent Allocated 3.2.2 Total Amount Allocated 3.2.3 25,000 Total Percent Allocated 3.2.3 3.3 Operational Management 3.3.1 68,500 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - - - - - - - - - - - - - > 3.3.2 0 Allocation Allocation 3.3.3 0 Percent Amount Activity Name Allocate 3.3.1 > 10% 6,850 Installation of Network Connections and Equipment Allocate 3.3.2 > 0% 0 Installation of Network Connections and Equipment Allocate 3.3.3 > 0% 0 Installation of Network Connections and Equipment Sub Totals 6,850 The following should balance out to fully allocate your resource costs across all activities: Total Amount Allocated 3.3.1 68,500 Total Percent Allocated 3.3.1 Total Amount Allocated 3.3.2 0 Total Percent Allocated 3.3.2 Total Amount Allocated 3.3.3 0 Total Percent Allocated 3.3.3 3.4 Service Support / Help Desk 3.4.1 190,000 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - - - - - - - - - - - - - > 3.4.2 0 Allocation Allocation 3.4.3 35,000 Percent Amount Activity Name Allocate 3.4.1 > 20% 38,000 Installation of Network Connections and Equipment Allocate 3.4.2 > 0% 0 Installation of Network Connections and Equipment Allocate 3.4.3 > 5% 1,750 Installation of Network Connections and Equipment Sub Totals 39,750 The following should balance out to fully allocate your resource costs across all activities: Total Amount Allocated 3.4.1 190,000 Total Percent Allocated 3.4.1 Total Amount Allocated 3.4.2 0 Total Percent Allocated 3.4.2 Total Amount Allocated 3.4.3 35,000 Total Percent Allocated 3.4.3 3.5 Hardware and Equipment 3.5.1 0 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - - - - - - - - - - - - - > 3.5.2 70,100 Allocation Allocation 3.5.3 8,000 Percent Amount Activity Name Allocate 3.5.1 > 0% 0 Installation of Network Connections and Equipment Allocate 3.5.2 > 70% 49,070 Installation of Network Connections and Equipment Allocate 3.5.3 > 70% 5,600 Installation of Network Connections and Equipment Sub Totals 54,670 The following should balance out to fully allocate your resource costs across all activities: Total Amount Allocated 3.5.1 0 Total Percent Allocated 3.5.1 Total Amount Allocated 3.5.2 70,100 Total Percent Allocated 3.5.2 Total Amount Allocated 3.5.3 8,000 Total Percent Allocated 3.5.3 3.6 External / Indirect Costs 3.6.1 0 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - - - - - - - - - - - - - > 3.6.2 50,100 Allocation Allocation 3.6.3 7,000 Percent Amount Activity Name Allocate 3.6.1 > 0% 0 Installation of Network Connections and Equipment
Allocate 3.2.2 > Allocate 3.2.3 >
40% 20,040 Installation of Network Connections and Equipment 40% 2,800 Installation of Network Connections and Equipment Sub Totals 22,840 The following should balance out to fully allocate your resource costs across all activities: Total Amount Allocated 3.6.1 0 Total Percent Allocated 3.6.1 Total Amount Allocated 3.6.2 50,100 Total Percent Allocated 3.6.2 Total Amount Allocated 3.6.3 7,000 Total Percent Allocated 3.6.3 3.7 0 3.7.1 0 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - - - - - - - - - - - - - > 3.7.2 0 Allocation Allocation 3.7.3 0 Percent Amount Activity Name Allocate 3.7.1 > 0% 0 Installation of Network Connections and Equipment Allocate 3.7.2 > 0% 0 Installation of Network Connections and Equipment Allocate 3.7.3 > 0% 0 Installation of Network Connections and Equipment Sub Totals 0 The following should balance out to fully allocate your resource costs across all activities: Total Amount Allocated 3.7.1 0 Total Percent Allocated 3.7.1 Total Amount Allocated 3.7.2 0 Total Percent Allocated 3.7.2 Total Amount Allocated 3.7.3 0 Total Percent Allocated 3.7.3 0 3.8.1 0 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - - - - - - - - - - - - - > 3.8.2 0 Allocation Allocation 3.8.3 0 Percent Amount Activity Name Allocate 3.8.1 > 0% 0 Installation of Network Connections and Equipment Allocate 3.8.2 > 0% 0 Installation of Network Connections and Equipment Allocate 3.8.3 > 0% 0 Installation of Network Connections and Equipment Sub Totals 0 The following should balance out to fully allocate your resource costs across all activities: Total Amount Allocated 3.8.1 0 Total Percent Allocated 3.8.1 Total Amount Allocated 3.8.2 0 Total Percent Allocated 3.8.2 Total Amount Allocated 3.8.3 0 Total Percent Allocated 3.8.3 0 3.9.1 0 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - - - - - - - - - - - - - > 3.9.2 0 Allocation Allocation 3.9.3 0 Percent Amount Activity Name Allocate 3.9.1 > 0% 0 Installation of Network Connections and Equipment Allocate 3.9.2 > 0% 0 Installation of Network Connections and Equipment Allocate 3.9.3 > 0% 0 Installation of Network Connections and Equipment Sub Totals 0 The following should balance out to fully allocate your resource costs across all activities: Total Amount Allocated 3.9.1 0 Total Percent Allocated 3.9.1 Total Amount Allocated 3.9.2 0 Total Percent Allocated 3.9.2 Total Amount Allocated 3.9.3 0 Total Percent Allocated 3.9.3 0 3.10.1 0 < - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.1 - - - - - - - - - - - - - - - > 3.10.2 0 Allocation Allocation 3.10.3 0 Percent Amount Activity Name Allocate 3.10.1 > 0% 0 Installation of Network Connections and Equipment
3.8
3.9
3.10
0% 0 Installation of Network Connections and Equipment 0% 0 Installation of Network Connections and Equipment Sub Totals 0 The following should balance out to fully allocate your resource costs across all activities: Total Amount Allocated 3.10.1 0 Total Percent Allocated 3.10.1 Total Amount Allocated 3.10.2 0 Total Percent Allocated 3.10.2 Total Amount Allocated 3.10.3 0 Total Percent Allocated 3.10.3
Step 3 - Summarize Activity Costs

4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 Installation of Network Connections and Equipment Trouble Shoot Network Connection Problems Database Optimization and Maintenance Data Migration and Integration End User Reports and Programs Strategic and Resource Management of Data 0 0 0 0 TOTAL ALLOCATED COSTS TOTAL COSTS PER TAB 3 OUT OF BALANCE AMOUNT 149,110 206,315 148,940 33,720 74,890 40,725 0 0 0 0 653,700 653,700 0
Main Menu Overview
cal activities performed by the Department.
epartment. Subject Matter Experts within the such as Setting Up IP Addresses, Processing
how personnel spend their time. Surveys and pend on various activities.
main activities that are somehow linked to customers. costs spent each month by the Department.
vity 4.1 - - - - - - - - - - - - - - - >
k Connections and Equipment k Connections and Equipment k Connections and Equipment
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.2 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 35% 35,000 Trouble Shoot Network Connection Problems 0% 0 Trouble Shoot Network Connection Problems 0% 0 Trouble Shoot Network Connection Problems Sub Totals 35,000 100% < Should add up to 100% if you are allocating any costs 0% < Should add up to 100% if you are allocating any costs 0% < Should add up to 100% if you are allocating any costs
Total Percent Allocated 3.1.1 Total Percent Allocated 3.1.2 Total Percent Allocated 3.1.3
vity 4.1 - - - - - - - - - - - - - - - >
k Connections and Equipment
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.2 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 0% 0 Trouble Shoot Network Connection Problems
k Connections and Equipment k Connections and Equipment
0% 0% Sub Totals
0 Trouble Shoot Network Connection Problems 0 Trouble Shoot Network Connection Problems 0
100% < Should add up to 100% if you are allocating any costs 0% < Should add up to 100% if you are allocating any costs 100% < Should add up to 100% if you are allocating any costs
vity 4.1 - - - - - - - - - - - - - - - >
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.2 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 20% 13,700 Trouble Shoot Network Connection Problems 0% 0 Trouble Shoot Network Connection Problems 0% 0 Trouble Shoot Network Connection Problems Sub Totals 13,700 100% < Should add up to 100% if you are allocating any costs 0% < Should add up to 100% if you are allocating any costs 0% < Should add up to 100% if you are allocating any costs
vity 4.1 - - - - - - - - - - - - - - - >
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.2 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 65% 123,500 Trouble Shoot Network Connection Problems 0% 0 Trouble Shoot Network Connection Problems 70% 24,500 Trouble Shoot Network Connection Problems Sub Totals 148,000 100% < Should add up to 100% if you are allocating any costs 0% < Should add up to 100% if you are allocating any costs 100% < Should add up to 100% if you are allocating any costs
vity 4.1 - - - - - - - - - - - - - - - >
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.2 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 0% 0 Trouble Shoot Network Connection Problems 5% 3,505 Trouble Shoot Network Connection Problems 5% 400 Trouble Shoot Network Connection Problems Sub Totals 3,905 0% < Should add up to 100% if you are allocating any costs 100% < Should add up to 100% if you are allocating any costs 100% < Should add up to 100% if you are allocating any costs
vity 4.1 - - - - - - - - - - - - - - - >
10% 10% Sub Totals
5,010 Trouble Shoot Network Connection Problems 700 Trouble Shoot Network Connection Problems 5,710
0% < Should add up to 100% if you are allocating any costs 100% < Should add up to 100% if you are allocating any costs 100% < Should add up to 100% if you are allocating any costs
vity 4.1 - - - - - - - - - - - - - - - >
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.2 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 0% 0 Trouble Shoot Network Connection Problems 0% 0 Trouble Shoot Network Connection Problems 0% 0 Trouble Shoot Network Connection Problems Sub Totals 0 0% < Should add up to 100% if you are allocating any costs 0% < Should add up to 100% if you are allocating any costs 0% < Should add up to 100% if you are allocating any costs
vity 4.1 - - - - - - - - - - - - - - - >
vity 4.1 - - - - - - - - - - - - - - - >
vity 4.1 - - - - - - - - - - - - - - - >
0% 0% Sub Totals
0 Trouble Shoot Network Connection Problems 0 Trouble Shoot Network Connection Problems 0
0% < Should add up to 100% if you are allocating any costs 0% < Should add up to 100% if you are allocating any costs 0% < Should add up to 100% if you are allocating any costs Place into Single Cell 149,110 206,315 148,940 33,720 74,890 40,725 0 0 0 0 653,700
4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.3 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 5% 5,000 Database Optimization and Maintenance 0% 0 Database Optimization and Maintenance 0% 0 Database Optimization and Maintenance Sub Totals 5,000
< - - - - - - - - - - - - - - - Allocation of Co Allocation Percent 10% 0% 0% Sub Totals
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.3 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 85% 85,000 Database Optimization and Maintenance
< - - - - - - - - - - - - - - - Allocation of Co Allocation Percent 10%
0% 85% Sub Totals
0 Database Optimization and Maintenance 21,250 Database Optimization and Maintenance 106,250
0% 5% Sub Totals
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.3 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 0% 0 Database Optimization and Maintenance 20% 14,020 Database Optimization and Maintenance 20% 1,600 Database Optimization and Maintenance Sub Totals 15,620
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.3 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 0% 0 Database Optimization and Maintenance
20% 20% Sub Totals
10,020 Database Optimization and Maintenance 1,400 Database Optimization and Maintenance 11,420
15% 15% Sub Totals
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.3 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 0% 0 Database Optimization and Maintenance 0% 0 Database Optimization and Maintenance 0% 0 Database Optimization and Maintenance Sub Totals 0
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.3 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 0% 0 Database Optimization and Maintenance
0% 0% Sub Totals
0 Database Optimization and Maintenance 0 Database Optimization and Maintenance 0
0% 0% Sub Totals
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.4 - - - - - - - - - - - - - - - > Allocation Amount Activity Name 10,000 Data Migration and Integration 0 Data Migration and Integration 0 Data Migration and Integration 10,000
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4 Allocation Allocation Percent Amount 20% 20,000 End User Reports and P 0% 0 End User Reports and P 0% 0 End User Reports and P Sub Totals 20,000
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.4 - - - - - - - - - - - - - - - > Allocation Amount Activity Name 10,000 Data Migration and Integration
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4 Allocation Allocation Percent Amount 5% 5,000 End User Reports and P
0 Data Migration and Integration 1,250 Data Migration and Integration 11,250
0% 5% Sub Totals
0 End User Reports and P 1,250 End User Reports and P 6,250
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.4 - - - - - - - - - - - - - - - > Allocation Amount Activity Name 0 Data Migration and Integration 0 Data Migration and Integration 0 Data Migration and Integration 0
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4 Allocation Allocation Percent Amount 15% 10,275 End User Reports and P 0% 0 End User Reports and P 0% 0 End User Reports and P Sub Totals 10,275
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4 Allocation Allocation Percent Amount 12% 22,800 End User Reports and P 0% 0 End User Reports and P 20% 7,000 End User Reports and P Sub Totals 29,800
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.4 - - - - - - - - - - - - - - - > Allocation Amount Activity Name 0 Data Migration and Integration 3,505 Data Migration and Integration 400 Data Migration and Integration 3,905
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4 Allocation Allocation Percent Amount 0% 0 End User Reports and P 0% 0 End User Reports and P 0% 0 End User Reports and P Sub Totals 0
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.4 - - - - - - - - - - - - - - - > Allocation Amount Activity Name 0 Data Migration and Integration
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4 Allocation Allocation Percent Amount 0% 0 End User Reports and P
7,515 Data Migration and Integration 1,050 Data Migration and Integration 8,565
15% 15% Sub Totals
7,515 End User Reports and P 1,050 End User Reports and P 8,565
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.4 - - - - - - - - - - - - - - - > Allocation Amount Activity Name 0 Data Migration and Integration
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4 Allocation Allocation Percent Amount 0% 0 End User Reports and P
0 Data Migration and Integration 0 Data Migration and Integration 0
0% 0% Sub Totals
0 End User Reports and P 0 End User Reports and P 0
cation of Costs to Activity 4.5 - - - - - - - - - - - - - - - > Activity Name End User Reports and Programs End User Reports and Programs End User Reports and Programs
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.6 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 5% 5,000 Strategic and Resource Management of Data 0% 0 Strategic and Resource Management of Data 0% 0 Strategic and Resource Management of Data Sub Totals 5,000
cation of Costs to Activity 4.5 - - - - - - - - - - - - - - - > Activity Name End User Reports and Programs
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.6 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 0% 0 Strategic and Resource Management of Data
End User Reports and Programs End User Reports and Programs
0% 5% Sub Totals
0 Strategic and Resource Management of Data 1,250 Strategic and Resource Management of Data 1,250
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.6 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 45% 30,825 Strategic and Resource Management of Data 0% 0 Strategic and Resource Management of Data 0% 0 Strategic and Resource Management of Data Sub Totals 30,825
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.6 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 1% 1,900 Strategic and Resource Management of Data 0% 0 Strategic and Resource Management of Data 5% 1,750 Strategic and Resource Management of Data Sub Totals 3,650
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.6 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 0% 0 Strategic and Resource Management of Data 0% 0 Strategic and Resource Management of Data 0% 0 Strategic and Resource Management of Data Sub Totals 0
0% 0% Sub Totals
0 Strategic and Resource Management of Data 0 Strategic and Resource Management of Data 0
0% 0% Sub Totals
0 Strategic and Resource Management of Data 0 Strategic and Resource Management of Data 0
ty 4.6 - - - - - - - - - - - - - - - >
ce Management of Data ce Management of Data ce Management of Data
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.7 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 0% 0 0% 0 0% 0 Sub Totals 0
0 0 0
ty 4.6 - - - - - - - - - - - - - - - >
ce Management of Data
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.7 - - - - - - - - - - - - - - - > Allocation Allocation Percent Amount Activity Name 0% 0
ce Management of Data ce Management of Data
0% 0% Sub Totals
0 0 0
0 0
ty 4.6 - - - - - - - - - - - - - - - >
0 0 0
ty 4.6 - - - - - - - - - - - - - - - >
0 0 0
ty 4.6 - - - - - - - - - - - - - - - >
0 0 0
ty 4.6 - - - - - - - - - - - - - - - >
0% 0% Sub Totals
0 0 0
0 0
ty 4.6 - - - - - - - - - - - - - - - >
0 0 0
ty 4.6 - - - - - - - - - - - - - - - >
0 0 0
ty 4.6 - - - - - - - - - - - - - - - >
0 0 0
ty 4.6 - - - - - - - - - - - - - - - >
0% 0% Sub Totals
0 0 0
0 0
< - - - - - - - - - - - - - - - Allocation of Co Allocation Percent 0 0% 0 0% 0 0% Sub Totals
< - - - - - - - - - - - - - - - Allocation of Co Allocation Percent 0 0%
0% 0% Sub Totals
0 0 0
0 0
0% 0% Sub Totals
0% 0% Sub Totals
0 0 0
0 0
0% 0% Sub Totals
0% 0% Sub Totals
0 0 0
0 0
0% 0% Sub Totals
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.9 - - - - - - - - - - - - - - - > Allocation Amount Activity Name 0 0 0 0
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4 Allocation Allocation Percent Amount 0 0% 0 0 0% 0 0 0% 0 Sub Totals 0
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4.9 - - - - - - - - - - - - - - - > Allocation Amount Activity Name 0
< - - - - - - - - - - - - - - - Allocation of Costs to Activity 4 Allocation Allocation Percent Amount 0 0% 0
0 0 0
0 0
0% 0% Sub Totals
0 0 0
0 0 0
0 0
0% 0% Sub Totals
0 0 0
0 0 0
0 0
0% 0% Sub Totals
0 0 0
location of Costs to Activity 4.10 - - - - - - - - - - - - - - - > Activity Name 0 0 0
location of Costs to Activity 4.10 - - - - - - - - - - - - - - - > Activity Name 0
0 0
0 0
0 0
Cost Model for Data Management Center (DMC) Activity Drivers

Purpose
The purpose of this worksheet is to identify and capture a driver that can be used to allocate the Activity Costs per Tab 4 to cost objects that the department wants to use for control over costs. These activity drivers will also help calculate unit cost which will be used to help benchmark costs over future periods. If the Cost Object is the same as your activities, then you do not need to complete Tab 6 - Cost Objects.
Step 1 - Identify the output metric that can used to drive and allocate activity costs
Activities per Tab 4 Installation of Network Connections and Equipment Trouble Shoot Network Connection Problems Database Optimization and Maintenance Data Migration and Integration End User Reports and Programs Strategic and Resource Management of Data 0 0 0 0 Output Metric (Activity Driver) Number of Installations Number of Help Desk Tickets Number of Database Work Orders Number of Data Transfer Projects Number of User Development Requests Number of Unique Data Repositories
4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10
Step 2 - Where applicable and measurable, convert your costs into hourly rates based on time involved.
Total Volume Hours per Unit 5 35 135 2 Total Hours 175 270
5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10
Activity Installation of Network Connections and Equipment Trouble Shoot Network Connection Problems UNABLE TO MEASURE UNABLE TO MEASURE End User Reports and Programs UNABLE TO MEASURE
30
60
Main Menu Overview
cate the Activity Costs per Tab 4 to rs will also help calculate unit cost same as your activities, then you
(Activity Driver) ns k Tickets Work Orders sfer Projects elopment Requests ata Repositories
Total Units 5 135 6 2 2 4
Unit Cost 29,822 1,528 24,823 16,860 37,445 10,181 #VALUE! #VALUE! #VALUE! #VALUE! Total
Total Cost 149,110 206,315 148,940 33,720 74,890 40,725 0 0 0 0 653,700
rates based on time involved.

Cost per Cost per Above Hours 29,822 $ 170.41 1,528 $ 5.66
37,445 $
624.08
Cost Model for Data Management Center (DMC) Cost Objects

Purpose
The purpose of this worksheet is to describe each of the cost objects that the department wants to use for managing costs. Cost objects may differ from your activities since they can represent anything for which you want to measure costs. If your activities represent your cost objects, then you do not have to complete this worksheet.
Step 1 - Identify Cost Objects for Each Activity and if different, then allocate the activity costs and identify the driver used for measuring the Cost Object
Activity Cost 149,110 % of Time Spent On 15% 85%
Ref Activity / Cost Object 4.1 Installation of Network Connections and Equipment 6.4.1.1 New Network Taps 6.4.1.2 Setup Local Area Networks - Remote Sites 6.4.1.3 6.4.1.4 6.4.1.5
Totals Activity Cost 206,315
100% % of Time Spent On
4.2 Trouble Shoot Network Connection Problems 6.4.2.1 ACTIVITIES USED FOR COST OBJECTS 6.4.2.2 REFER BACK TO STEP 3 / TAB 4 6.4.2.3 6.4.2.4 6.4.2.5
0% % of Time Spent On 65% 35%
4.3 Database Optimization and Maintenance 6.4.3.1 Routine Scheduled Maintenance 6.4.3.2 Unscheduled Fixes and Bugs 6.4.3.3 6.4.3.4 6.4.3.5
100% % of Time Spent On 40% 60%
4.4 Data Migration and Integration 6.4.4.1 Design & Develop Interfaces 6.4.4.2 Data Extract / Transform / Loads (ETL) 6.4.4.3 6.4.4.4 6.4.4.5
Totals
100%
4.5 End User Reports and Programs 6.4.5.1 One Time Ad Hoc Requests 6.4.5.2 New Functional Procedure 6.4.5.3 6.4.5.4 6.4.5.5
Activity Cost 74,890
% of Time Spent On 70% 30%
4.6 Strategic and Resource Management of Data 6.4.6.1 ACTIVITIES USED FOR COST OBJECTS 6.4.6.2 REFER BACK TO STEP 3 / TAB 4 6.4.6.3 6.4.6.4 6.4.6.5
Totals Activity Cost 4.7 6.4.7.1 6.4.7.2 6.4.7.3 6.4.7.4 6.4.7.5 Totals Activity Cost 4.8 6.4.8.1 6.4.8.2 6.4.8.3 6.4.8.4 6.4.8.5 Totals Activity Cost 4.9 6.4.9.1 6.4.9.2 6.4.9.3 6.4.9.4 6.4.9.5 Totals Activity 0 0 0 0 0 0
0% % of Time
Cost 4.10 6.4.10.1 6.4.10.2 6.4.10.3 6.4.10.4 6.4.10.5 Totals Here is a quick double check to make sure you didn't miss anything: Total Activity Cost per this Worksheet 653,700 Total Activity Cost per Tab 4 653,700 Difference 0 0 0
Spent On
0%
Main Menu Overview
wants to use for thing for which you e to complete this worksheet.
Allocated Cost
Output Driver
Total Units 18 $ 12 $
Unit Cost 1,242.58 10,561.96 #DIV/0! #DIV/0! #DIV/0!
Ref 6.4.1.1 6.4.1.2 6.4.1.3 6.4.1.4 6.4.1.5
22,367 Number of New Taps 126,744 Number of Remote LAN Setups 0 0 0 149,110 Allocated Cost Total Units
Output Driver
Unit Cost 6.4.2.1 6.4.2.2 6.4.2.3 6.4.2.4 6.4.2.5
0 Allocated Cost Total Units 27 $ 11 $ Unit Cost
Output Driver
Ref
96,811 Number of Maintenance Routines 52,129 Number of Unscheduled Action Events 0 0 0 148,940 Allocated Cost Total Units
3,585.59 6.4.3.1 4,739.00 6.4.3.2 6.4.3.3 6.4.3.4 6.4.3.5
Output Driver
Unit Cost 1 $ 2 $
Ref
13,488 Number of Interface Tables 20,232 Number of ETL Routines Completed 0 0 0 33,720
13,488.00 6.4.4.1 10,116.00 6.4.4.2 6.4.4.3 6.4.4.4 6.4.4.5
Allocated Cost
Output Driver
Total Units 5 $ 1 $
Unit Cost
Ref
52,423 Number of End User Requests 22,467 Number of Functional Reworks 0 0 0 74,890 Allocated Cost Total Units
10,484.60 6.4.5.1 22,467.00 6.4.5.2 6.4.5.3 6.4.5.4 6.4.5.5
Output Driver
Unit Cost
Ref 6.4.6.1 6.4.6.2 6.4.6.3 6.4.6.4 6.4.6.5
0 Allocated Cost Total Units Unit Cost
Output Driver
Ref 6.4.7.1 6.4.7.2 6.4.7.3 6.4.7.4 6.4.7.5
Output Driver
Ref 6.4.8.1 6.4.8.2 6.4.8.3 6.4.8.4 6.4.8.5
Output Driver
Ref 6.4.9.1 6.4.9.2 6.4.9.3 6.4.9.4 6.4.9.5
0 Allocated Total Unit
Cost
Output Driver
Units
Cost
Ref 6.4.10.1 6.4.10.2 6.4.10.3 6.4.10.4 6.4.10.5
Cost Model for Data Management Center (DMC) Final Report

Purpose
This worksheet captures and reports your costs as determined by various tabs in this workbook. Indicate the Reporting Period > Jul-07
1. Departmental Costs by Resource (Baseline Cost to be Allocated)

Resource Pool 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 Network Engineers Database Administrators Operational Management Service Support / Help Desk Hardware and Equipment External / Indirect Costs 0 0 0 0 Total Resource Costs Amount 100,000 125,000 68,500 225,000 78,100 57,100 0 0 0 0 653,700
2. Cost by Cost Objects (Final Allocated Costs)

Ref 6.4.1.1 6.4.1.2 4.2 6.4.3.1 6.4.3.2 6.4.4.1 6.4.4.2 6.4.5.1 6.4.5.2 4.6 Cost Object New Network Taps Setup Local Area Networks - Remote Sites Installation of Network Connections and Equipment Routine Scheduled Maintenance Unscheduled Fixes and Bugs Design & Develop Interfaces Data Extract / Transform / Loads (ETL) One Time Ad Hoc Requests New Functional Procedure Strategic and Resource Management of Data Amount 22,367 126,744 206,315 96,811 52,129 13,488 20,232 52,423 22,467 40,725 Units 18 12 135 27 11 1 2 5 1 4
$ $ $ $ $ $ $ $ $ $
Total Cost Object Costs Out of Balance Amount
653,700 0
3. The information above can be presented in graphic form per below:
Resource Cost Breakdown

External / Indirect Costs, 57,100
Network Engineers, 100,000
Hardware and Equipment, 78,100 Database Administrators, 125,000 Service Support / Help Desk, 225,000
Operational Management, 68,500
New Network Taps
Final Cost Breakdown
Setup Local Area Networks - Remote Sites Installation of Network Connections and Equipment Routine Scheduled Maintenance Unscheduled Fixes and Bugs Design & Develop Interfaces Data Extract / Transform / Loads (ETL) One Time Ad Hoc Requests
New Functional Procedure Strategic and Resource Management of Data
Main Menu Overview
Jul-07
$ $ $ $ $ $ $ $ $ $
Unit Cost 1,242.58 10,561.96 1,528.26 3,585.59 4,739.00 13,488.00 10,116.00 10,484.60 22,467.00 10,181.25
New Network Taps
Setup Local Area Networks - Remote
Installation of Network Connections and Equipment
Routine Scheduled Maintenance
Unscheduled Fixes and Bugs
Design & Develop Interfaces
Data Extract / Transform / Loads
One Time Ad Hoc Requests
New Functional Procedure
Strategic and Resource Management
Cost Model for Data Management Center (DMC) Glossary of Terms

Activity - Actions taken to produce some form of output, such as setting up IP addresses or Processing Invoices. Usually consists of several tasks. Activity Based Costing - A methodology for allocating resources to activities and allocating activities to cost objects based on allocation drivers. Activity Driver - A basis for allocating activity costs to cost objects such as customer service activities. Usually is determined based on a cause effect relationship; i.e. the more drivers consumed, the more costs. Actual Cost - Amount actually spent on resources per the General Ledger Allocation - A logical method of allocating costs based on cause effect relationships that reflects consumption. Cost Object - What you would like to assign cost to, such as the cost of services. A cost object can be anything that you want to measure cost against. For example, in the world of financial accounting, a general ledger account would be the cost object for capturing and reporting cost. Direct Cost - Cost that are directly traceable to the project and charged to the project without allocations involved Drivers - The use of units, throughputs or some output that serves as the logical basis for allocating cost Indirect Cost - Cost not directly associated with a project, but allocated to reflect the fact that the project gets a benefit from the resource and should reflect some measure of its cost. Period - Time periods used in the model such as one year or two quarters. The initial period used in the model is usually the previous fiscal year for baseline data and any periods thereafter are used for planning and budgeting in the current fiscal year. Resource - Departmental assets (labor, equipment, etc.) that perform the work (activities). Resource Driver - A basis for allocating resource costs to activities Resource Pool - A set of resources (labor, equipment, etc.) that collectively comes together so that the organization can execute on a service or activity. Unit Cost - Total Activity Cost divided by Driver Volume. Unit Cost are often used for comparisons and benchmarking to reduce costs over time. Unit cost are also used for budgeting based on future expected volumes.
Main Menu Overview
ocessing Invoices.
ctivities. Usually
s consumption.
locations involved

Activity Based Costing Model

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Activity Based Costing Model

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Cost Model for Data Management Center (DMC) Main Menu

Main Menu Overview

Resource Pools Activity Costing

Activity Drivers Cost Objects

Final Report Glossary

etter insights behind the cost of operations.

o this cost model

Cost Model for Data Management Center (DMC) Overview of Model

How are Costs Allocated?

How do I use the Model?

How do I use the information in this Model?

How do I update / maintain the Model?

What are some rules to follow in building the Model?

Main Menu Overview

Resource Pools Activity Costing

Activity Drivers Cost Objects

Final Report Glossary

tivities incur costs through the

to your cost objects (such as the ckets processed is an output

s as of a cut-off period will most likely s, and installation of new

ge. For example, if a his model will require

urce drivers involved in a good idea to validate the

require re-building the

ata directly with the General

want to focus on the vital few activities

pecific resource pools. May want to direct labor cost.

Cost Model for Data Management Center (DMC) Resource Pools

653,700 770,000 -116,300

85% 100% 15%

Main Menu Overview

Resource Pools Activity Costing

Activity Drivers Cost Objects

ssociated costs. This represents an important of the model.

Time Frame Jul-07 Jul-07 Jul-07 Jul-07 Jul-07 Jul-07

mponents such as labor, e to get allocated differently

ed for a good cost allocation. Equipment 3.n.2 0 0 0 0 70,100 50,100 0 0 0 0

Activity Drivers Cost Objects

Final Report Glossary

Cost Model for Data Management Center (DMC) Activity Costing

Step 1 - List Key Activities

Allocate 3.2.2 > Allocate 3.2.3 >

Allocate 3.6.2 > Allocate 3.6.3 >

Allocate 3.10.2 > Allocate 3.10.3 >

Step 3 - Summarize Activity Costs

Main Menu Overview

Resource Pools Activity Costing

Activity Drivers Cost Objects

cal activities performed by the Department.

vity 4.1 - - - - - - - - - - - - - - - >

k Connections and Equipment k Connections and Equipment k Connections and Equipment

vity 4.1 - - - - - - - - - - - - - - - >

k Connections and Equipment

k Connections and Equipment k Connections and Equipment

vity 4.1 - - - - - - - - - - - - - - - >

k Connections and Equipment k Connections and Equipment k Connections and Equipment

vity 4.1 - - - - - - - - - - - - - - - >

k Connections and Equipment k Connections and Equipment k Connections and Equipment

vity 4.1 - - - - - - - - - - - - - - - >

k Connections and Equipment k Connections and Equipment k Connections and Equipment

vity 4.1 - - - - - - - - - - - - - - - >

k Connections and Equipment

k Connections and Equipment k Connections and Equipment

10% 10% Sub Totals

vity 4.1 - - - - - - - - - - - - - - - >