Research On Higher Education Cost Management Based On Activity Based Costing

With the development of China's socialist market economy and the continuous deepening of reform system, a sound external environment provides an unprecedented development opportunity for China's colleges and universities. With the increased enrollment in universities and the increased investment in higher education, the shortage of funds in colleges and universities has become the bottleneck in the development of colleges and universities. Furthermore, the colleges and universities'irrational blind investment and improper financial management means has enlarged the operational and financial risks in colleges and universities. Under this circumstance, the practice of China's higher education reform and development is in urgent need of accurate, systematical education cost information and the average cost information per student, which asks the colleges and universities to have standard financial accounting regulations and financial management ones. Because of the implementation of colleges and universities'self-help recruitment and self-charging system, students or parents become the buyer of higher education, and the related bodies are naturally concerned about the cost of higher education which can determine the education prices. So the higher education cost has become the focus of government, schools and individuals. As a result of this, the higher education cost's business accounting and management is an issue which needs to be solved, and we should find an effective method for accounting college education cost and improve a series of rules matching the cost-accounting methods of higher education. In this paper, the Activity Based Costing (ABC) and Activity-Based Costing Management (ABCM) are introduced to discuss this issue.Starting from the related concept of higher education costs management, this paper has chosen the Economics theories and Management theories as the theoretical basis, and has given a feasibility analysis for the colleges and universities'cost management based on the ABC from three aspects, which are current financial accounting and financial management system, Activity Based Costing used in external environment of colleges and universities cost management and internal motivations. Then from the angle of practical framework, the paper mentions about the higher education cost management model based on Activity Based Costing in accordance with the general measurement terms in ABC and the higher education cost classification. Based on the model, the colleges and universities cost management protection system has been studied.By standardizing the research methods, the higher education cost management model based on Activity Based Costing has been established and put into guiding the practice of cost management. On the basis of previous thoughts on introducing Activity Based Costing concept into the colleges and universities management, the colleges and universities costs measuring processes has been further refined in the paper. And based on the precise measurement and calculation, the paper brings forth new ideas about the guarantee system of Activity Based Costing Management, especially it gives the idea that the colleges and universities financial accounting system should be combined with the financial management system because China's higher education is mainly supported by the national investment.