Definition of activities based costing, Managerial Accounting

Definition of Activities based costing

Activity based costing is a system that focuses on activities as the fundamental cost objects and uses the costs of these activities as building blocks for compiling the cost of other objects.


Cost attribution to cost units on the basis of benefits received from indirect activities I e. ordering setting up assuring quality etc. activity based costing is only a generic approach and it can a aprt of both order costing system or a process costing system.

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