Unlike traditional systems that often apply a "one-size-fits-all" overhead rate based on volume, ABC recognizes that different products consume resources in vastly different ways. Core Components of ABC
Unlike traditional costing methods that allocate overhead based on a single volume metric (like labor hours or machine hours), ABC recognizes that specific products or services may consume resources differently. It assigns costs based on the "cause and effect" relationship between activities and costs. activity based costing definition
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