The activity-based costing method allocates costs across business processes and provides a more accurate picture of how costs should be charged to products and services.

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Activity-based costing (ABC) is a methodology that assigns costs to activities based on the resources they consume and then allocates those costs to products or services based on their usage of those activities. This approach provides a more accurate picture of the true cost of producing a product or providing a service, as well as the profitability of individual products or services.

The Activity-Based Costing Method Allocates Costs Across Business Processes and Provides