1. Learning Outcomes:

Define activity-based costing (ABC).

Explain what are activities, and how they identified.

Describe the process that is used to assign costs in an ABC system.

2. Action Required:

Watch the short video in the following link:

3 Minutes! Activity Based Costing Managerial Accounting Example

3. Test your Knowledge (Question):

Explain the term activity-based costing (ABC). On what basis, activities are identified in an ABC system?