Activity-based costing is:

A)the process of identifying all activities and relating these activities to the events, circumstances, or conditions that create or drive the need for the activities and the resources consumed.
B)a method of determining the most favorable decision alternative by using activities as the basis on which to build the cost proposal.
C)an approach to cost assignment in which all operating activities are identified, costs are accumulated by those activities, and after nonvalue-adding activities are dealt with, costs are assigned based on the appropriate activity base.
D)an approach to product costing in which most costs are eliminated.

The correct answer is C) an approach to cost assignment in which all operating activities are identified, costs are accumulated by those activities, and after nonvalue-adding activities are dealt with, costs are assigned based on the appropriate activity base.

To arrive at this answer, let's break down the options and see how we can eliminate the incorrect choices:

Option A) states that activity-based costing is the process of identifying all activities and relating them to the events, circumstances, or conditions that create or drive the need for the activities and the resources consumed. While this statement is true, it does not fully define activity-based costing and its purpose.

Option B) suggests that activity-based costing is a method of determining the most favorable decision alternative using activities as the basis for the cost proposal. While it is true that activity-based costing can help in decision-making, this statement does not fully describe the process of activity-based costing.

Option D) claims that activity-based costing is an approach to product costing in which most costs are eliminated. This statement is incorrect as activity-based costing does not eliminate costs but rather helps in assigning costs accurately.

Therefore, we are left with option C) as the correct answer. It accurately defines activity-based costing as an approach to cost assignment in which all operating activities are identified, costs are accumulated by those activities, and after nonvalue-adding activities are dealt with, costs are assigned based on the appropriate activity base.