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Activity-Based Costing (ABC) is a modern costing methodology that allocates overhead costs more accurately by identifying activities in an organization and assigning costs to products or services based on their actual consumption of these activities. ABC provides better insights into cost behavior and helps management make informed decisions regarding pricing, product mix, and process improvement. The implementation of ABC involves several levels that ensure the precise allocation of costs, which can be broadly categorized as the unit-level, batch-level, product-level, and facility-level activities. Unit-level activities are those activities that are performed every time a unit of product is produced. The cost of these activities varies directly with the number of units produced. Examples include direct materials handling, machine operations per unit, or ______ _________ __________ ______ ________ _________ ____ _______ ________ ____ _______.
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