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    Activity Based Costing and Traditional Product Costing

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    Activity Based Costing and Traditional Product Costing, definitions and some examples of each. Some detail please.

    © BrainMass Inc. brainmass.com October 10, 2019, 1:02 am ad1c9bdddf
    https://brainmass.com/business/product-costing/activity-based-costing-traditional-product-costing-318572

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    Dear student,
    Activity Based Costing and Traditional Product Costing, definitions and some examples of each. Some detail please.

    Activity based costing:

    Meaning:

    Activity-Based Costing (ABC) is a costing method that identifies activities in an organization and assigns the cost of each activity to products and services according to the actual consumption by each in order to arrive at the actual cost of products and services.

    In Activity based costing costs of all organization's resources are assigned to the products and services that the organization manufacture/render. The main intention behind the assignment of resource cost to the product/services is to find out the cost of the product and the resultant profitability.
    Definition:
    Activity based costing is a method of allocating costs to products and services. It is generally used as a tool for planning and control.
    Purpose:

    The main purpose of Activity Bases costing ...

    Solution Summary

    Activity based costing and traditional product costing is examined.

    $2.19