Activity-based costing attempts to better allocate costs to the proper users of overhead by focusing on activities.

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Activity-based costing (ABC) is a cost allocation method that focuses on identifying and assigning costs to specific activities or processes. By doing so, ABC accounts for the true cost of products or services, as it traces overhead costs to the activities that create them. This method is designed to provide more accurate cost information, which in turn can help businesses make better decisions regarding pricing, product mix, and process improvements.

Activity-Based Costing Attempts to Better Allocate Costs to the Proper