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What is Activity Based Costing?

 , October 25, 2015
Activity-based costing, or ABC, is an accounting approach that assigns cost to activities based on their resource usage. Activities can then be related to products, services and projects. It results in less overhead than conventional costing methods as it allows more direct costs to be assigned.
Overview: Activity Based Costing
FunctionManagement AccountingFinancial Management
DefinitionTracking cost to activities.
ValueProvides detailed information about the cost of programs, projects, initiatives, services and products to support management decision making.
Related TechniquesCost To Company
Cost Benefit Analysis

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