Recent advances in artificial intelligence (AI) have attracted much attention in the management accounting profession. With its transformative capabilities and complexity, AI offers countless opportunities alongside significant challenges in its adoption. Activity-based costing (ABC) has played a pivotal role in enabling organizations to gain accurate insights into cost structures. However, traditional ABC frameworks often face challenges in managing the dynamic and voluminous data of modern enterprises. The integration of AI offers an opportunity to transform ABC by increasing its adaptability, accuracy, and predictive capabilities. This paper explores the potential of AI to automate data processing, identify cost drivers, and optimize resource allocation, supported by real-time analytics and advanced algorithmic approaches. This study found that the integration of artificial intelligence (AI) into activity-based costing (ABC) systems represents a transformative change in cost accounting methods that overcomes the limitations of traditional ABC systems in managing complexity and high volumes of data.