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 ineducation always gives the best return. Higher education, in particular, is essential fordeveloping human assets in a country and is provided through colleges and universities. Itprovides an opportunity for the students to develop and upgrade their overall knowledge andhelps in personality development. But throughout the world, higher education is in crisis dueto a financial resource crunch. It is a big challenge for the developing countries to impart andincrease higher education with these resource constraints. The different demand-supply gap inhigher education makes it very competitive for the students, staff, and resources. The cost ofhigher education is increasing daily and becoming expensive. India is a developing and youthcentric country, so proper accounting and distribution of higher education costs are relevantand 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 ofindirect costs. This will help in better utilization of limited available resources for highereducation. The present paper attempts to calculate the cost of higher education in anundergraduate college by using Activity Based Costing.