I NEED 2 PARAGRAPHS
What is activity-based costing?
What is its goal?
What company circumstances especially encourage the use of activity-based costing?
Expert Answer
It is one of the Managerial Accounting Method used for allocating the operating costs. Here Costs are distributed based on the activities or processes that are required for an Output. Here, operating and overhead costs are allocated to products or departments such as planning, manufacturing, administrative etc., (which generates costs) that are generated during the production process.
Here, Activity Cost Drivers i.e. an activity or process which cause the changes (increase or decrease) in the cost of
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