Activity-Based Costing (ABC) is a tool that helps companies improve efficiency and reduce costs without compromising customer value. Despite its benefits, ABC adoption rates are low in countries like India due to its complexity. ABC provides accurate cost information for better decision-making, pricing, and profit analysis, as well as insights into cost drivers, customer profitability, and process improvements. It was developed to address the limitations of traditional cost management systems and is essential for effective cost control and performance measurement.