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Activity based costing is considered a better method of allocating manufacturing overhead than the more simplified "plant-wide" overhead allocation method.

1. Name three advantages of activity based costing over plant-wide allocation.

2. Activity based costing does require more work than a plant-wide allocation. Under what circumstances is it worth the extra effort?

3. What is the typically result when activity based costing is adopted, in terms of cost allocation between different products?

Please describe with details.