Activity-based costing,
a method that's precise,
Tracing costs to actions,
it really is quite nice.
From overheads to labor,
each expense is tracked,
Giving clear insight,
with no details lacked.
Allocating resources,
by activities defined,
Costs assigned to products,
in a manner refined.
Understanding where the money goes,
in every single case,
ABC brings clarity,
at a detailed pace!
ABC Costing:
- Basis of Allocation: Specific activities that drive costs.
- Accuracy: More accurate, especially for diverse or complex processes.
- Cost Drivers: Detailed, based on actual activities, reducing the risk of cost distortion.
- Suitability: Ideal for complex environments with varied products or services.
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