Activity Based Costing to Determine Tuition Fee in University: A case study

Abstract

Since the competition between universities become more competitive thus it raises the urge to the universities to increase their quality, service and facilities. As an impact, universities need more fund to improve their quality. Even though universities are nonprofit organization, universities need the fund to support their operational activities and most private universities rely on tuition fee. Thus, university needs accurate cost calculation to support their activities. One of the best costing method is Activity Based Costing (ABC). The aim of this research is to determine tuition fee in a private university by using ABC calculation. This research uses a descriptive qualitative and within this qualitative research paradigm, a case study design is used to explain the calculation process. The results found that ABC can provide accurate cost allocation to determine the optimum tuition fee for each student. The number of paper that discussing ABC implementation in higher education institution in Indonesia is still limited, thus this paper adds the number of papers that provide ABC calculation to determine optimum tuition fee in a higher education institution.