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ABC is a costing model that identifies the cost pools, or activity centres, in an organization. It assigns costs to products and services (cost drivers), based on the number of events or transactions that are taking place in the process of providing a product or service. As a result, Activity Based Management can support managers to see how shareholder value can be maximized and how corporate performance can be improved. Historically, cost accounting models related indirect costs on the basis of volume.
TYPICAL BENEFITS OF ACTIVITY-BASED COSTING:
?« Identify the most profitable customers, products and channels...
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