Activity- Based Cost Method– A Case Study of an Under Graduate College

Education is important for the growth and development of a country. Money invested in education always gives the best return. Higher education, in particular, is essential for developing human assets in a country and is provided through colleges and universities. It provides an opportunity for the students to develop and upgrade their overall knowledge and helps in personality development. But throughout the world, higher education is in crisis due to a financial resource crunch. It is a big challenge for the developing countries to impart and increase higher education with these resource constraints. The different demand-supply gap in higher education makes it very competitive for the students, staff, and resources. The cost of higher education is increasing daily and becoming expensive. India is a developing and youthcentric country, so proper accounting and distribution of higher education costs are relevant and essential here. Cost accounting helps in the proper calculation and control of costs. Activity-based costing is especially useful here as it gives a proper and accurate distribution of indirect costs. This will help in better utilization of limited available resources for higher education. The present paper attempts to calculate the cost of higher education in an undergraduate college by using Activity Based Costing.