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Activity based costing is a costing methodology that aligns an organization's resources and their activity to the company's products and/or services as it relates to their cost consumption. Unlike job costing methods, ABC costing incorporates more indirect costs into direct production activities to help drive pricing decisions.
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ADVERTISEMENTS: Methods of Costing: Methods to be used for the ascertainment of cost of production differ from industry to industry. It primarily depends on the manufacturing process and also on the methods of measuring the departmental output and finished products. Basically, there are two methods of costing (as per CIMA Terminology) viz.: (i) Specific Order [.]
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