Activity-Based Costing (ABC) is an accounting method that assigns costs to products or services based on the specific activities and resources they consume, rather than using broad averages.
Stop Guessing Your Costs: The Definition of ABC Costing definition of abc costing
#Accounting #CostAccounting #ABCCosting #FinanceTips #BusinessStrategy #Profitability Activity-Based Costing (ABC) is an accounting method that
ABC answers the question: "What does each activity actually cost us, and who is using it?" definition of abc costing
Have you switched from traditional costing to ABC? What surprised you about your real costs? 👇
Most traditional accounting methods lump overhead costs (like rent, utilities, and admin salaries) into a single pool and spread them evenly across all products. This often leads to "peanut butter costing"—smearing costs evenly when some products take much more work than others.