Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 26

What type of company needs an activity-based costing system?

Step 1 of 3

Activity Based Costing:

Activity Based costing is a costing approach which apportioned resource cost based on cost activities to the cost objects. According to Activity based costing every product or service requires activities to be performed and these activities have cot. And, these costs are apportioned based on cost objects.

These cost objects are based on consumption estimates.