- Define an Activity Based Cost System (ABC) and what it is used for.

2- Discuss how an Activity Based Cost System can be used for a manufacturer of flat screen TV's (Plasma and LCD). To help:

a- Maximize profits

b- Control costs

c- Determine production mix of LCD and Plasma models

d- Selling price for the 2 different models

e- Adjusting sales prices of two different models

f- Analyze cost differences between various models, assume plasmas are larger and require more overhead due to increased production time and more careful material handling.