Ending October; Realizing Fears

I completed my first project for the Cost Economics course. I wasn't sure what I was in for, or exactly what I was going to do, but I somehow made it through. The project was laid out in such a way that you reviewed the information, your looked at and practiced with a mock assignment, so that when time for the assignment came due, you were properly prepared. Well, not everything works out as planned.

I read and reviewed the material, the Rumble text "The Costs and Economics of Open and Distance Learning." While reading the material it all made plenty of sense, because I was only reading it of course. I learned and felt I had an understanding of the basic concepts, such as overhead (sidenote: there was always the statement that DC public schools had the largest overhead in the country. I would quote this with the understanding that it meant that per student the cost to run the administrative and other sides of the school system were huge in comparison to other cities. I wasn't too far off course.) However, the Rumble text provided me a better explanation with direct and indirect costs as it matter in education. This will also prove beneficial as I begin to venture into the world of budgeting for the compliance costs at my current position.

So as I continued to read, I thought I had a basic understanding of the concepts and would be able to apply them to the project. Even the mock assignment made sense to me. So, I started the project, and was amazed. The basic ideas made sense, the maintenance, overheads, and development. These ideas to me were sound and made sense when applying them to the project. However, the more detailed analysis of the project made me investigate more and dig into a deeper undertsanding, or at least try to.

Gaining an understanding of depreciation or annualization was very difficult. As a homeowner and car owner, the idea of depreciation does not lose its message with me. However, when applied to education it doesn't hold the same value. Depreciation it what helps to distribute the costs of the planning or start up of the course development over time. An example was given in regards to the building where the product is developed. Yes, in the beginning it appears to be a huge costs, but when applied to the life of the program it is stretched throughout the development of the program.

The hardest idea for me was annualization. Literally, I reviewed this idea hours and days. The key concept of this idea that was hard for me to wrap my mind around was "the opportunity costs of interest forgone" (45). I took this as understanding that rather than spending the money or losing value in the money that was spent, it could have earned money in another account instead of being spent. In my mind, it makes more sense to stick with what is actually happening and not what may have happened. I'm still working my way, through this. Maybe the conference that is still ongoing with Rumble will provide additional insight.