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When you use the activity based costing to assign the company overhead to different products, it is based on all of the activities that the company uses during the manufacturing process. With the use of activity based costing, management can easily identify products requiring more overheads and can price them accordingly. The allocation of overhead that uses the traditional coasting can cause the bottom line to be over or under the correct value. The activity based costing is more accurate when a company has multiple products or departments.