Features Of Activity Based Costing

ABC acts as a diagnostic tool. By breaking down processes into activities, it becomes easy to see which tasks add value to the customer and which are simply "waste" (like excessive moving of materials or redundant inspections). This feature makes ABC a powerful partner for Lean and Six Sigma initiatives. 7. Enhanced Precision in Product Costing

Measure how much of an activity a product or customer requires (such as the number of parts used or the number of service calls made).Identifying these drivers allows for a cause-and-effect relationship between the work done and the final product. 4. Hierarchical Classification of Costs features of activity based costing