Advantage of Unit Costing in Similar Products

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Question:

What is the primary advantage of using unit costing in industries producing similar products? Question 9Answer a. Simplifies cost allocation b. Eliminates all fixed costs c. Ignores variable costs d. Reduces production volume

Answer:

The primary advantage of using unit costing in industries producing similar products is:

a. Simplifies cost allocation

Unit costing allows companies to allocate costs more easily across similar products, making it simpler to determine the cost per unit and manage pricing and profitability.