Determination of School Price through Activity-Based Costing Approach in The Private Secondary Schools in Sokoto State, Nigeria

Abstract

There are growing number of private educational institutions especially secondary schools as a result of increase in the demand for private education. Gaining competitive advantage by a private school is a crucial role being played by school managers, and it lies on making critical decisions including determination of annual school fees to charge parents. Setting up school prices is influenced by some factors including but not limited to parents who are the customers, existence of other school in the market, cost incurred in providing educational services, and so on. This study focused on the implementation of activity-based costing approach to set school fees. The study analysed the financial information/data obtained from the schools used as a case study. The study compared the traditional costing approach and activity-based costing approach in terms of price setting based on the financial information analysed. The study found that implementation of activity-based approach was more profitable to the schools than using traditional approach. The study therefore, recommended the implementation of activity-based costing system to set the annual school fees.