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Business Glossary

Business Definition for: activity-based costing (ABC)

Dictionary of Accounting Terms

activity-based costing (ABC)

costing system that identifies the various activities performed in a firm and uses multiple cost drivers (volume and nonvolume based cost drivers) to assign overhead costs (or indirect costs) to products. ABC recognizes the causal relationship of cost drivers with activities.

Referring Terms:

Copyright © 2005, 2000, 1995, 1987 by Barron's Educational Series, Inc., Reprinted by arrangement with Publisher.

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