Glossary
Terms & Glossaries of Shipping and Trading
ABC (Activity-Based Costing)
Activity-based costing (ABC) is a costing method that assigns overhead and indirect costs to related products and services.
This accounting method of costing recognizes the relationship between costs, overhead activities, and manufactured products, assigning indirect costs to products less arbitrarily than traditional costing methods. However, some indirect costs, such as management and office staff salaries, are difficult to assign to a product.
