Research On Application Of Activity Based Costing In The Cost Calculation Of Higher Education In China

Education is an essential area for China to develop, which is closely connected with thefuture of our nation. For better development of education area, it is required that instituteof higher education (IHE) better scientific administrate system for various aspects, forinstance, the accounting work toward education cost. For the current situation of China,there are some drawbacks for higher education cost accounting area, including theunder-developed accounting approach, which leads for the data is not reliable, can notreflect the accurate assumption of routine work.With the development of economics in21stcentury, the government and society pay moreattention on higher education cost accounting area. In2009, the finance department ofChina enact <Accounting System for Institute of Higher Education>, which made arevolution to cost accounting approach in terms of institute of higher education. Asignificant clause required IHE.Use the approach of a connection of Accrual Basis andCash Basis, which means in the future, IHE might gradually take example by businessadministration for more scientific approaches.Activity-Based Closing (ABC) is one of the advanced approaches of cost accounting. Theprinciple is using the Activity as the intermediary agent of resources and products, formore reasonable allocate indirect cost. This is accord with the main characteristic of IHE,so ABC can be taken use into cost accounting of IHE.In the beginning of this journal, it will talk about the concept of IHE and ABC, with thebasic of prior research, identify the feasibility and importance of ABC. Then with the coreinformation and calculate approach of ABC, dividend the activity centre of IHE and affirmeach cost driver. After that, according to the planned steps of ABC, with the basic data ofSD University, it can be got the result of the average education cost of undergraduate,postgraduate and PHD student respectively. At last, according to the analysis of calculatedresults, it can be confirmed the advantage of ABC for using in IHE, for offering reliabledata for daily routine of IHE administration work.