You are on page 1of 2

Activity-based costing (ABC) is a costing methodology that identifies the activities that a firm

performs, and then assigns indirect costs to products. An activity based costing (ABC) system
recognizes the relationship between costs, activities and products, and through this relationship
assigns indirect costs to products less arbitrarily than traditional methods. ABC works best in
complex environments, where there are many machines and products, and tangled processes that
are not easy to sort out.

A Work breakdown structure (WBS) is a key project deliverable that organizes the team's
work into manageable sections. A work breakdown structure element may be
a product, data, service, or any combination thereof. A WBS also provides the necessary
framework for detailed cost estimating and control along with providing guidance for schedule
development and control.

You might also like