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Write about Activity based costing.

Write about Activity based costing.

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Answer #1

Activity based cost in works differently for different activities.

It assigns different overhead and indirect cost related to different product and services.

This type of Costing is generally used in product line ,customer profitability analysis ,service pricing etc.

To calculate it ,we need to divide cost pool total to the cost driver

This type of activity for assigned cost to the different activities at a real cause of the overhead and then assign activities to the product that are actually demanding the activities

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