With activity-based costing, the goal is to develop a product cost that captures the amount of each resource consumed by the activities performed to produce a specific product.

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Activity-based costing (ABC) is a costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption of each resource. The goal is to provide more accurate product costing by capturing the specific costs of resources used in each activity that contributes to the production of a particular product.

With Activity-Based Costing, the Goal Is to Develop a Product