Activity-based costing (ABC) has become one of today’s most popular methods of costing by using activities to allocate indirect costs, such as overhead. Versions of ABC originated as early as the 1920’s; however, advancements have been adopted in modern business. Activity-based costing is an essential aspect of accurate, more reliable cost information to produce true costs in representing financial data. Applications, implementation procedures, and changes in ABC are illustrated as a guide to better understanding ABC in manufacturing.