Activity-based costing allows managers to evaluate overall production capacity and focus on producing the mix of products that is most profitable.

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Activity-based costing assigns costs to specific activities or processes and allows for a more accurate determination of the cost of producing each product or service. This information can help managers make better decisions about production capacity and focus on producing the mix of products that will generate the most profit.

Activity-Based Costing Allows Managers to Evaluate Overall Production Capacity and Focus