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Working out your unit costs
To unit-cost, start by listing all the costs directly associated
with the service, such as front line staff, equipment, office
costs and so on. Don't forget to include a reasonable share
of central costs such as the salaries of your director and
finance and administration staff, telephone costs, rent, fax
paper and other day-to-day essentials.
Decide what your 'unit' is - for example, an hour-long visit,
a crèche place, an information brochure, or a health
promotion pack. To work out your unit cost, calculate how
many units you can reasonably supply in a year - don't over-estimate,
and remember periods when you are closed. Then divide the
total annual cost of keeping the organisation and the service
going by the annual number of units. For instance:
| Cost of counselling service: |
£40,000 |
| Share of central costs: |
£5,000 |
| Total: |
£45,000 |
Number of counselling hours: 50 per week x 50 weeks = 2,500
£45,000 divided by 2,500 = £18 per one-hour unit
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