Costs Per Career as Financial Indicators in Higher Education Institutions

Abstract

Higher education institutions contribute to society in multiple ways through the technical and professional formation of the population and disseminating new information. This diversity of objectives that interact with each other hinder both the acquisition and the allocation of resources. In other words, they affect the institutions' capacity to meet costs at a given level of financing or income. For this reason, the costs attributable to degrees bestowed by educational institutions help to provide critical financial information, especially when computing the margin between income and expenses, evidencing the efficiency in resource consumption, and significantly aiding in the decision-making process. This article presents an integral and flexible methodology for designing an Activity-Based Costing system to determine the costs of degrees bestowed by higher education institutions applying the method to a Chilean public university. The results highlight nine degrees with a surplus and one with a financial deficit, the high impact on the cost of degrees stemming from the distribution of efforts of academics in the varied activities undertaken, the effect of grants among degrees, and other results of university administration, indicating the relevance of these models for the definition of government policies. Furthermore, these results' contribution in a current global context is discussed where institutions are found to be devising readjustments to their activities that have been affected by confinement caused by the global SARS-CoV-2 virus pandemic. Keywords: Costing in educational institutions; costs of degrees; activities-based costing in education; higher education institutions; Chile