Survey Costs

Managerial Accounting

Managerial accounting defines the principles used to develop costs. It differs from financial accounting in that it is intended to provide insight for better organizational decision making. As such, managerial accounting has no standards, and its formulas and data are often unique to an organization. To learn more about managerial accounting, see the Institute of Management Accountants' Web site (http://www.imanet.org).

Much of what goes into managerial accounting is built on an organization's operations and is often proprietary and confidential. However, there are some basic concepts that are universal to costing in all survey operations. These concepts, and the costing principles derived from them, provide the foundation for any organization to understand and build its own managerial accounting system for survey costing and budget management. Understanding them helps researchers understand how their budget and costs are related to survey quality.

Managerial accounting uses six basic concepts to define costs:

• 1.
  Cost object: The thing managers want to know how to cost
• 2.
  Cost driver: Any factor that affects costs
• 3.
  Variable cost: A cost that changes in proportion to a cost driver
• 4.
  Fixed cost: A cost that does not change in total
• 5.
  Direct cost: Those costs traced to a cost object. These are usually, but not always, variable costs.
• 6.
  Indirect cost: Those costs allocated to a cost object. These are often, but not always, fixed costs.

What constitutes a fixed or variable cost changes by survey mode. What constitutes a direct or indirect cost can also change by mode of data collection, but usually less often. What is important to remember is that the determination is made by the cost drivers and object(s).

Some cost drivers are generally constant across all survey modes. General cost drivers that cross survey modes include the following:

• Number of completed interviews (n size)
• Topic
• Survey length
• Time in field
• Data manipulation
• Validation requirements
• Net effective incidence
• Desired response rate
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• Analytical labor
• Travel to client

For example, if the cost object is a computer-assisted telephone interviewing (CATI) survey, cost drivers might include the following list of items:

• Length and complexity of CATI programming
• Number of open-ended questions and associated coding
• Desired data outputs and associated reporting

Once the cost drivers have been identified for a particular cost object, a list of direct and indirect costs associated with those cost drivers can be constructed. These cost categories will also usually be constant across organizations, although the actual costs associated with each can be highly variable. Using the CATI example, an organization might see the following direct and indirect

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