Question: There are two main problems which tend to occur when traditional (simple) costing methods are used to provide information for management decision purposes. These two

There are two main problems which tend to occur when traditional (simple) costing methods are used to provide information for management decision purposes. These two problems include: (i) product cost distortions, or cross-subsidies; and (ii) the exclusiveness of traditional product costing (i.e. the treatment of non-manufacturing costs differ between traditional cost systems and ABC systems).

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