what is activity based costing abc 
activity based costing abc is a costing method that assigns overhead and indirect costs to related products and services this accounting method of costing recognizes the relationship between costs overhead activities and manufactured products assigning indirect costs to products less arbitrarily than traditional costing methods however some indirect costs such as management and office staff salaries are difficult to assign to a product abc is used to get a better grasp on costs allowing companies to form a more appropriate pricing strategy investopedia theresa chiechi