Understanding Activity Based Costing and its Relation to Cost of Quality Management

The video tutorial discusses the application of activity-based costing (ABC) in quality management. It explains how costs are allocated to specific activities, particularly focusing on the cost of quality, which includes appraisal, prevention, and failure costs. The tutorial highlights challenges in tracing indirect costs and suggests using ABC to better allocate these costs. It outlines steps for implementing ABC, such as dividing activities into pools and using metrics for cost assignment.

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