introduction In recent years, overhead costs have become an increasingly significant part of product cost, and managers have needed higher quality cost information to permit greater control and better response to the pressures of increased competition. An ABC system involves identifying the activity that causes the incurrence of a cost, this activity is known as cost driver. Machine setup, inspections, production order preparation, and material handling tasks are examples of cost drivers. The number of times each action is performed, as well as the total cost of the activity, are estimated, and a cost per activity is calculated. Product manufacturing processes, as well as administrative and marketing efforts, are all subject to activity-based costing. The ABC approach enabled more precise costing than previous overhead application methods, as well as more effective production, administrative, and marketing management. Activity-based costing should be highlighted in organizations that generate many goods with varying levels of manufacturing and other value chain activities. Product that are less complex to manufacture will almost certainly be awarded a higher share of overhead than product that are more complex, which will almost certainly be assigned a lower share of overhead. The benefit of ABC is that it more clearly focuses on cost-causing activities and directs management attention to them. In a typical costing strategy, overhead costs are organized under a cost centre and then absorbed into product costs using one of several methods, such as direct labour hours, machine hours, and so on. The biggest source of error here is in the overhead rate computation, which is often based on direct labour hours or machine hours. Question In conclusion discuss the concept of based costing what is the advantages that activity-based costing has over traditional costing method? -not less than 500 words