ng services apply activity base costing

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Carpet cleaning services apply activity base costing
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ABC is a method of costing that allocates overhead and indirect expenses to connected goods and services. By recognizing the connection between costs, overhead activities, and produced goods, this accounting method of costing assigns indirect costs to items less randomly than previous costing techniques.

ABC is a way for more accurately allocating overhead expenses by tying them to specific activities. Costs that have been assigned to activities can then be applied to the cost objects that make use of those activities.

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