Content

Costing and Pricing Policy

Policy overview

1 Purpose

This policy sets out the basis on which University Goods and Services will be costed and subsequently priced for provision to external customers.

2 Scope

This policy applies to the Costing and Pricing of all University Goods and Services and should be read in conjunction with the Costing and Pricing (General) Procedure and the Costing and Pricing (Research) Procedure.

Unless otherwise approved, this policy and related procedures forms the basis for Costing and Pricing University Goods and Services, with the exception of student fees that are set in accordance with the (Fees) Statute 2010 and approved by the University Council.

3 Policy Statement

The University will seek to maximise the financial benefit from the provision of its Goods and Services through appropriate Costing and Pricing.

4 Principles

The following principles will apply:

  1. The Costing methodology that will be applied to Goods and Services will be Full Economic Cost and this will include all Direct Costs and Indirect Costs attributable to the production of the Good/s or provision of the Service/s.
  2. Unless prohibited by legislation or funding body regulations, the Pricing decision will be determined using the Full Economic Cost as the benchmark and subsequently indexed using a minimum Operating Margin. This will be the minimum price to be charged to the third party.
  3. Pricing decisions that result in a price that is less than the required minimum will be accompanied by appropriate justification to support the decision. This justification will be authorised by the Divisional Head.
  4. Approvers are required to observe competitive neutrality requirements to ensure the University does not use public resources in such a way as to gain an unfair competitive advantage.
  5. Approvers are required to observe and comply with University requirements for the identification and notification of any conflicts of interest that may arise in Costing and Pricing decisions.
  6. Approvers and approval levels are aligned with the University's Financial Delegations Schedule (refer Section 6 - Financial Management Practices Manual Financial Delegations).

5 References

Nil.

6 Schedules

This policy must be read in conjunction with its subordinate schedules as provided in the table below.

7 Policy Information

Subordinate Schedules

Accountable Officer

Chief Financial Officer

Policy Type

Executive Policy

Approved Date

27/8/2014

Effective Date

27/8/2014

Review Date

27/8/2015

Relevant Legislation

Financial Accountability Act 2009

Financial Performance and Management Standards 2009

University of Southern Queensland (Fees) Statute 2010

Related Policies

Code of Conduct Policy
(Section 4.2.2 Avoiding Conflicts of Interest)

Contract Management Policy and Procedure (under development)

Outside Employment Undertaken by USQ Employees Policy and Procedure

Related Procedures

Costing and Pricing (General) Procedure

Costing and Pricing (Research) Procedure

Related forms, publications and websites

Costing and Pricing Tool (under development)

Financial Management Practices Manual

Full Cost Pricing Policy (Qld)

National Competition Policy: Competitive Neutrality and Queensland Government Business Activities

Definitions

Terms defined in the Definitions Dictionary

Costing

Involves determining the value of resources consumed in the production of Goods or the provision of Services and is one of the key considerations in the Pricing decision....more

Direct Costs

Costs incurred in, and directly attributable to, the production of Goods and Services that can be reliably measured....more

Full Economic Cost

The Full Economic Cost applicable to the University and attributable to producing Goods or performing a Service includes all Direct and Indirect Costs that are accurately captured and can be reliably measured....more

Goods and Services

Tangible and/or intangible products which are the outcome of human effort and/or knowledge that the University is either obliged to charge or has a right to charge a third party for the provision of these products....more

Indirect Costs

Costs that are not directly attributable to the production of Goods/Services but are necessarily incurred by the organisation in operational support of the organisational unit producing the product/s....more

Operating Margin

The factor applied to the Full Economic Cost of producing Goods and/or providing a Service to determine the minimum price that will be charged for the Goods/Service. This represents the operational and support costs that contribute to producing the Goods/Service....more

Pricing

Refers to the process of determining a figure at which Goods and/or Services will be exchanged in the marketplace between third parties in an arm's length transaction. Key considerations in Pricing decisions include cost, market and competitive conditions and any required rate of return....more

Definitions that relate to this policy only

Keywords

Costing, Pricing, Full Economic Cost

TRIM Record No

13/400PL

*This file is in Portable Document Format (PDF) which requires the use of Adobe Acrobat Reader. A free copy of Acrobat Reader may be obtained from Adobe. Users who are unable to access information in PDF should contact the Policy Coordinator policy@usq.edu.au to obtain this information in an alternative format.
Failure to adhere to this policy may be a breach of the USQ Code of Conduct.