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Kitchen Appliances Ltd is considering adopting ABC costing and has identified the following five activity cost pools if it makes the switch: 1. Purchasing 2.

Kitchen Appliances Ltd is considering adopting ABC costing and has identified the following five activity cost pools if it makes the switch:

1. Purchasing

2. Handling materials

3. Machine setups

4. Assembly

5. Utilities

Required: i. Identify a suitable cost driver for each of the five activity cost pools.

ii. What would make the company switch to an ABC system?

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