In this study the contribution of activity-based costing (ABC) in overhead cost allocation systems within Australian universities is examined. A questionnaire survey from the 27 finance directors and/or chief financial and cost accountants is examined. ABC as a strategic cost management system depends on the variables for instance, understanding ABC, strategic cost; reduce expense, better overhead cost allocation and value creation. The result of analysis of variance is found significant (0.022) at 0.05 for hypothesis H1 and H2 is proved significant theoretically using management and internal champion support. The survey results and interviews revealed that some Australian universities using ABC method received benefits, improved cost reduction and better resource allocation with revenue surplus. The paper finally developed a generic model of cost pools and drivers of ABC implementation in the universities.