The main difference between activity-based costing and traditional costing systems is that activity-based costing uses a separate allocation base for each activity.

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Activity-based costing is a more accurate method of costing compared to traditional costing systems because it identifies the activities that increase costs and allocates those costs based on the activity that caused them. This process requires a separate allocation base for each activity, which is not the case in traditional costing systems where a single allocation base is used for all activities.

The Main Difference Between Activity-Based Costing and Traditional Costing Systems