Accounting Dictionary


ABC refers to Activity Based Costing

Activity Based Costing is a method of allocating overhead costs. Each cost driver is assigned an estimated overhead cost. For example, let say that each time you set up for a new product it costs $100,000. We say that setup is a cost driver. If you had 7 set ups this year, then you would allocate 7 x $100,000 or $700,000 to estimated overhead costs.

Sign Up to Learn More!

Join our mailing list today to get notified of new discount offers, course updates, Roger CPA Review news, and more!