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ABC is a relatively newer product costing method that assigns overhead costs to a cost object on a cause and effect basis. By contrast, traditional

ABC is a relatively newer product costing method that assigns overhead costs to a cost object on a cause and effect basis. By contrast, traditional costing methods rely on volume based allocation bases to allocate overhead costs. Discuss why volume based traditional costing methods may result in product cost distortion and how ABC method may help prevent it.

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