When activity-based costing is used, the number of activities will generally be the same as the number of production departments.

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Activity-based costing (ABC) identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each. This means the number of activities identified can be different from the number of production departments, as ABC focuses on the broad range of activities that contribute to production, not just the departmental structure.

When Activity-Based Costing Is Used, the Number of Activities Will