a) Ali and Johan are best friends who used their savings and all the monetary gifts they received during graduation to start their own business manufacturing different kinds of facemasks, given the high demand. We dont need a product costing system. We are a small manufacturer with a just in time approach so our inventories are minimal. We have no influence over the product price; whatever the big manufacturers do, we follow. Our accountant only comes in during Fridays and she is already far too busy to bother with a product costing system. Is this a reasonable attitude? Explain why. (5 marks)

b) For each type of service organisation (Professional Service Firms, Service Shops, and Mass Service Entities):

i) Identify the key features and give an example of a service company most likely to fall in each category. (1.5 x 3 = 4.5 marks) ii)

ii) Describe the type of costing system that is most appropriate for each type of service organisation. (0.5 x 3 = 1.5 marks)