Activity?based accounting is a system that first accumulates overhead costs for each of the activities of an organization, and then assigns the costs of activities to the products, services, or other cost objects that caused that activity.

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Activity-based accounting is a costing system that identifies and assigns costs to activities, and then assigns those costs to products, services, or other cost objects based on their use of those activities.

Activity?based Accounting Is a System That First Accumulates Overhead Costs