This report provides a comprehensive overview of Activity Based Costing (ABC) within the context of financial management. It details how a business enterprise can implement ABC, focusing on the assignment of indirect costs and overheads to related products and services. The report highlights the advantages of ABC, such as providing accurate manufacturing costs and precise allocation of overheads, while also acknowledging disadvantages like time-consuming data collection and analysis. Furthermore, it examines the benefits of ABC over traditional costing techniques, emphasizing its accuracy and intricacy in allocating indirect costs based on cost driver rates. The conclusion reinforces ABC as an essential method for assigning indirect business overheads to products and services.
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