An activity-based costing model for an engineering department of an Indian university

With the changing business environment, the ability of the traditional costing system to provide accurate and useful information to management about costs of products or services has decreased and hence, modern costing systems, like activity-based costing (ABC) are developed to overcome the shortcomings of the traditional method. ABC is often used as a strategic management tool as it analyses costs of a product or service at various activity levels and provides more accurate cost information. This paper deals with the implementation of ABC model in an engineering department of an autonomous university in India. Although there are very few published research papers related to implementation of ABC model in a university, but till date, ABC has not been adopted in any university of India or Indian subcontinent. The results obtained after implementation of ABC model shows the benefits of adopting an ABC-like modern costing system to facilitate efficient management decision and administrative policy making. This paper also discusses various roadblocks or challenges encountered during the implementation process of ABC model in an Indian technical education scenario.