Activity-based costing differs from traditional product costing in the allocation of:

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Quizplus · Accepted Answer

Activity-based costing focuses on allocating manufacturing overhead costs based on the specific activities that drive those costs, whereas traditional product costing typically allocates those costs based on a general measure such as direct labor hours or machine hours. Direct labor and direct material costs are typically allocated in the same way under both methods.

Activity-Based Costing Differs from Traditional Product Costing in the Allocation