One advantage of traditional full absorption costing is that it allocates fixed costs to products, which leads to basing short-term decisions on more relevant information.

Question

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Traditional full absorption costing allocates all manufacturing costs to products, including fixed costs, but this can distort product costs and lead to poor short-term decision-making because fixed costs do not change with production volume in the short term.

One Advantage of Traditional Full Absorption Costing Is That It