ABC Cost Method
Activity-Based Costing (ABC) method is a calculation technique that was initially developed to enhance the profitability of products and selection of manufactured products optimal mix. This costing method can be defined as a technique that entails allocating manufacturing overhead costs to goods using a more logical approach. In this case, the technique first allocates costs to activities that are the actual causes of overhead. Once this is carried out, the activity-based costing then allocates the cost of those activities only to products that require the activities. The method involves cost allocation and decision making since it was developed to incorporate long-term planning components and forecasts (Dorin
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