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Activity Based Costs (ABC) what is it and how does it impact profitability.

Activity Based Costs (ABC) what is it and how does it impact profitability.

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Answer #1

Explanation:

Activity Based Cost:

Activity based cost meant to be the method of accounting that identify the activity performed by company and apply cost to products of the company. This will help showing relationship of cost, activities and product.

  • Activity based cost is used to target the profitability of the company as this method is activity base and that activity is associated with different task. Activity based cost will define and measures the cost and performance of different objectives. This objectives are meant to raise profitability of company.
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