Final answer:
Activity-based costing is a method used by businesses to allocate costs to products or services. It takes into account activities that do not directly relate to the number of units produced.
Step-by-step explanation:
Activity-based costing is a method used by businesses to allocate costs to products or services. It involves identifying and tracking the costs of various activities within the organization and then assigning those costs to the products or services that benefit from those activities. One of the advantages of activity-based costing is that it takes into account activities that do not directly relate to the number of units produced. These non-volume-based activities could be things like setup costs, quality control, or customer service.