©2015-2021 Lean Strategies International LLC.
Activity based costing (ABC) is a system used in accounting that identifies costs based on activities performed. The system then uses the drivers of cost (indirect and direct) to allocate or reserve costs to products, projects, customers or other segments. The system attempts to allocate costs like overhead on a more accurate basis than simply assigning direct labor or machine hours which may change from product to product.
Subscribe below and receive lean, six sigma, operations, supply chain, logistics, distribution and business terms in your mailbox.
CLICK HERE TO SUBSCRIBE