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How is ABC Costing superior to traditional costing models in modern manufacturing environments, particularly those with relatively high capital investment and relatively low labor costs,
How is ABC Costing superior to traditional costing models in modern manufacturing environments, particularly those with relatively high capital investment and relatively low labor costs, plus highly differentiated manufacturing processes like specialized manufacturing cells. In particular, discuss how simple traditional methods for allocating factory overhead can cause major distortions in calculated costs, and how this can adversely affect production and pricing decisions common to managerial accounting?
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