'ABC is still at a relatively early stage of its development and its implications for process control may in the final analysis be more important than its product costing implications. It is a good time for every organisation to consider whether or not ABC is appropriate to its particular circumstances.

J Innes & F Mitchell, Activity Based Costing, A Review with Case Studies, CIMA, 1990.

You are required:

(a)To contrast the feature of organisations which would benefit from ABC with those which would not;

(b)To explain in what ways ABC may be used to manage costs, and the limitations of these approaches;

(c)To explain and to discuss the use of target costing to control product costs.