Question: Company RRR is considering implementing a new cost allocation system to more accurately assign overhead costs to its products. The company currently uses a traditional

  • Company RRR is considering implementing a new cost allocation system to more accurately assign overhead costs to its products. The company currently uses a traditional costing method based on direct labor hours but recognizes the limitations of this approach in today's complex manufacturing environment. Discuss the advantages and disadvantages of activity-based costing (ABC) compared to traditional costing methods, and provide recommendations for implementing an effective cost allocation system that aligns with the company's strategic objectives.
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