What is Activity Based Cost (ABC) in Marketing?

Learn Activity Based Cost (ABC) definition in marketing with explanation to study “What is Activity Based Cost (ABC)”. Study activity based cost (abc) explanation with marketing terms to review marketing course for online MBA programs.

Activity Based Cost (ABC) Definition

  • Accounting procedures that can quantify the true profitability of different activities by identifying their actual costs.

    Principles of Marketing by Philip T. Kotler, Gary Armstrong



Activity Based Cost (ABC) Explanation

Activity based costing is an accounting technique that defines and allocate costs to overhead functions after allocating those costs to goods and products. This method originally examines the correlation of costs overhead activities, and produced goods. Activity based accounting technique helps to assign indirect costs less swiftly than existing methods.

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