Charles Co makes three products for the market, the Diva (D), the Classic (C), and the Poser (P). The cost accountant has given the following estimates for the upcoming quarter ending June 30, 2022.

(a) Prepare and present a profit statement showing a total profit for each product and totals for the sales and various cost lines using activity-based costing.

(b) Using your own words, define the term volume-related cost drivers and transaction-based drivers, making reference to part (bii) to illustrate the answer. (c) Using the terms referred to in part (b) and give three reasons why activity-based costing is a more pertinent approach to determining costs than the traditional absorption costing approach, especially in the manufacturing environment.

Overheads can be re-analyzed into cost pools as follows: You have been provided with the following estimates for the quarter