engleski

Activity based costing as a means to full costing- Possibilities and constraints for European universities

This paper presents possibilities and constraints for implementation of Activity Based Costing (ABC) method, as a full costing method, at European Universities. We investigated current practice and trends in developing cost allocation method at Universities in European Union. Precisely, we analyzed trends and current movements at Universities in EU countries and the major problems in setting ABC method at University. By using this information, we proposed guidelines for development of full costing system at University of Zagreb that is based on following parameters: categories of costs, main activities, cost objects and cost drivers. Our paper show that despite public demands for efficient managing within Universities still very small percentage of Universities has implemented full costing systems. The most important obstacles for that are: resistance to change, non reliable data in current account systems, lack of management will and legal barriers. Furthermore, our paper explains that one of challenges involved in implementing full costing systems seems to be the fact that Universities are still income oriented than cost oriented. Nevertheless, positive trends in implementing full costing method, respectively ABC method, are obvious. We highlighted Universities in Portugal and Liverpool as Universities that have successfully implemented ABC method as well as all drivers, barriers and benefits that came out from that implementation.

University; Faculty; traditional allocation model; ABC method; price determination

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