Asked by Emily Jackson on May 20, 2024
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In activity-based costing, all manufacturing costs must be included in product costs.
Activity-Based Costing
A costing method that assigns costs to products or services based on the activities they require, aiming to more accurately reflect the costs incurred.
Manufacturing Costs
Expenses related to the production of goods, including direct materials, direct labor, and manufacturing overhead.
Product Costs
All costs that are involved in acquiring or making a product. In the case of manufactured goods, these costs consist of direct materials, direct labor, and manufacturing overhead. Also see Inventoriable costs.
- Understand the fundamentals of activity-based costing (ABC) and how it differs from traditional costing systems.
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Learning Objectives
- Understand the fundamentals of activity-based costing (ABC) and how it differs from traditional costing systems.
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