In an activity-based costing system, the expresses how much of the activity is carried out and is used as the allocation base for assigning overhead costs.

Activity measure

Explanation:

Activity based costing is the costing method that identifies activities and based on the cost of each activity it assigns cost to all goods and services produced by the business. It is a way of assigning indirect cost to direct cost.

The activity measure is degree to which an activity is carried out and is used as a yardstick in allocating overhead cost.

For example if the process of packaging is done 100 times compared to quality checks of 10 per day, packaging has higher activity measure and contributes more to overhead cost.

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