Activity-based management focuses on identifying product costs as either value-adding or nonvalue-adding activities.

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Activity-based management is a cost management system that aims to identify and evaluate activities that drive costs and improve efficiency. It identifies the activities that create value for the customers and eliminate non-value-adding activities. Thus, it focuses on identifying product costs as either value-adding or non-value-adding activities.

Activity-Based Management Focuses on Identifying Product Costs as Either Value-Adding