Laila Limited is a UK based company manufactures three main types of products - Small, Medium and Large. The company currently uses the traditional costing system wisere overheads are allocated to the three products on the basis of labour hours. Management is however not happy with this approach as it provides limited explanation for the overheads. Managers therefore have no knowledge of the causes of the overheads and therefore find it difficult to manage these overheads. With effect from the 2006 financial year, the company plans to introduce activity-based costing as a replacement for the traditional costing system. However, the two systems will be operated side-by-side until 2009 when the traditional system will be faced out. As a management accounting assistant you have been asked by the Chief Financial Officer to prepare a report on the benefits of activity-based costing to the company. You manage to collect information on each product as follows