Activity-based costing (ABC) Definition A costing method based on activities that is designed to provide managers with cost information for strategic and other decisions that potentially affect capacity and therefore fixed costs.
An activity base definition is a computation of whatever affects the incurred of a variable cost. An activity base definition relates to production activity that is used to describe factory overhead to production.
Activity Based Costing System A Tool for Management to Aid Decision Making: Learning Objectives: Define and explain activity based costing (ABC) system. How various manufacturing and non-manufacturing costs are treated under activity based costing system? What are advantages and disadvantages of ABC system Definition