What is an advantage of activity-based costing compared to traditional costing?

Question

Quizplus · Accepted Answer

Activity-based costing links overhead costs to specific cost drivers, resulting in a more accurate and fairer costing. Traditional costing may use arbitrary methods to allocate overhead costs, resulting in inaccurate cost estimates. While ABC may require a higher initial implementation cost, the benefits of accuracy and fairness outweigh the initial cost.

What Is an Advantage of Activity-Based Costing Compared to Traditional