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Answer (D)

Traditional cost method take one pool of company's total overhead cost to allocate universally to all
products. Traditional costing is not suitable where the more number of product and larger number of
overhead.

Activity Base Costing (ABC)  identi es all speci c cost overhead operations related to the manufacture of
each product. It solve the problem of inaccuracy that result true costing of product and correct pro t to
particular product.

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