A major advantage of activity-based costing (ABC) is that it reduces unit cost distortions arising from overhead allocations that often occur using traditional cost accounting systems.

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This statement is true. Activity-based costing is designed to allocate overhead costs more accurately by identifying and assigning costs to specific activities or processes that actually consume those costs. This reduces the chance of overhead costs being improperly allocated to products or services, which can result in distorted unit cost calculations.

A Major Advantage of Activity-Based Costing (ABC) Is That It