An activity measure in activity-based costing expresses how much of an activity is carried out and it is used as the allocation base for assigning overhead costs to products and services.

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An activity measure is a unit of measurement that is used to assign costs to cost objects, such as products or services, in activity-based costing. It represents the amount of a particular activity that is consumed by a cost object, and is used as the basis for allocating overhead costs. Examples of activity measures include machine hours, number of setups, and number of orders processed.

An Activity Measure in Activity-Based Costing Expresses How Much of an Activity