Final answer:
Under activity-based costing, a university degree program is viewed as a cost object, which helps in determining the actual cost of running the program. Opportunity cost, including forgone income, plays a crucial role in evaluating the true cost of a college education. Recent graduates who are job hunting fall into the category of frictionally unemployed.
Step-by-step explanation:
Under activity-based costing (ABC), a degree program at a university can be considered a cost object. ABC is a method of assigning overhead and indirect costs—such as administrative expenses—to products and services in a more accurate way. In the context of higher education, each degree program can be seen as a separate service with its own set of activities that incur costs. These programs require resources like faculty time, facilities, and materials. By using activity-based costing, a university can determine the actual cost of running each program, which can be helpful for budgeting and financial planning purposes.
The concept of opportunity cost plays a significant role in evaluating the value of a college degree. Opportunity cost refers to the value of the best alternative foregone in making a decision. For college students, this could include the earnings they give up by attending school instead of working full-time. Determining the opportunity cost of a college education involves considering not just the tuition, fees, and books, but also the potential income and experiences forfeited while pursuing the degree.
As for college graduates entering the job market, many who have not found employment by the time of graduation are counted in the category of the unemployed. Specifically, these individuals would be classified as 'frictionally unemployed,' which represents people who are temporarily unemployed while moving between jobs, entering the workforce, or transitioning from education to work.