Cost Analysis and PerDiem System (CAPS)

1. Cost Analysis and PerDiem System (CAPS) www.ar-caps.com 6409 Fayettevill St. Suite 120/319 Durham, NC 27713 (919) 949-2951 Ar-caps@nc.rr.com Expenses

2. Essentials of Getting to Unit Cost • Finding a unit cost requires three elements: • Assigning Expenses • Conducting Periodic Animal Inventories • Selecting Cost Drivers Used to Allocate Expense The Cost Analysis and PerDiem System (CAPS) uses these components to allocate expense. And it does it easily, quickly, and inexpensively.

3. Cost Assignment • Identifiers are used to assign each expense to the two cost objects which benefit from the expense: • The segment of the department, and • The species • Segments of the department, and species in the program which are being tracked are referred to as Expense Class and Species Class, respectively.

4. Cost Assignment – Expense Categories and Classes • Expense Categories are major products or operational units in the program for which cost will be monitored. Expense Classes are the segments within each of these categories. • Typical Expense Categories are: Feed, Bedding, Husbandry, Cage Wash, Health Care, and General and Administrative. • Expense Classes are specific products or activities that will be tracked within each category. An identifier is assigned to each Class. Feed classes may include: Standard Feed-Autoclave Feed-Irradiated Feed, etc. Health Care classes may include: Drugs-Medical Supplies-Quality Assurance-Laboratory Expense,etc.

5. Cost Assignment – Species Classes • Species Classes are developed based on the housing scheme or care procedures that may incur a separate unit cost. This may involve the use of a higher cost product, more intensive care, special procedures, etc. • Species Classes for Mice could include Standard Mouse-IVP Mouse-Biohazard Mouse-Barrier Mouse, etc. • Species Classes can refer to an individual species class or a group of species classes. Group Species Classes are formed based on functional groups or the way expenses are made. • Groups of species classes may include: All Animals-All Rodents-All Mice-All Rats-Biohazard-Quarantine, etc.

6. Conduct a Periodic Animal Inventory • Periodic animal inventories of each individual species class is done using the assigned identifiers. • This census is reported in Board Days (or Care Days) each month. • Board Days are the accumulated total of daily animal census. If 20 dogs were in the facility each day for the entire month of March there would be 620 board days (31 x 20).

7. Cost Drivers • Cost Drivers are elements in the program that determine the rate at which resources are used by each species class. Common Cost Drivers are board days, square feet, consumption, weight, frequency, labor, transactions, etc. • Cost Drivers are associated with each Expense Class being tracked by the program. • Each cost driver must be measured through a Resource Study to determine use by each individual species class. • Cost Driver values can be obtained through direct measurement, by estimation based on the program’s knowledge base, or may be found in the manufacturer’s literature (diet consumption, for example).

8. Types of Expenses • The Type of Expense is determined by the species class identifier. • There are three types of expenses: • Indirect Expenses are allocated among all species and classes. • Species class 200-All Animals. Expenses are allocated among all species classes • Semi-Indirect Expenses are allocated among many, but not all species and classes. • Remaining 200 series are Group species class identifiers. Expenses are allocated among the individual species within that group • Direct Expenses are used by one species and/or class only. • Identified with the 100 series for individual species classes

9. Some Final Notes • The EC Form and CAPS workbook can be customized to each program. • Cost drivers can be intimidating at first glance, but none are difficult to measure.

10. More Information on CAPS • Two videos are presented to show CAPS features: • Key Elements of the Cost Analysis and PerDiem System (CAPS) describes the Expense and Census Forms (EC Form), the Cost Driver Array, and the Cost Allocation Tool (CAT). These illustrate how the information presented here is used. • Demonstration of the Cost Analysis and PerDiem System (CAPS) shows how the EC Form and CAPS work together, using an example program with over 2,00 expenses, 18 individual species classes, and 10 group species classes.