Question
Mt. Royal Cake Company produces gourmet cakes for sale to high end grocery stores and restaurants. They make a variety ofcakes, from standard(but yummy) layer
Mt. Royal Cake Company produces gourmet cakes for sale to high end grocery stores and restaurants. They make a variety ofcakes, from standard(but yummy) layer cakes to quirky one of a kind designs with multiple types of icing and decorating. They currently use a job order costing system to apply overhead costs to jobs with a single allocation rate for overhead based on the number of cakes in the order. Overhead costs includesupervision, equipmentmaintenance, and packaging. They are considering moving to an activity based costingsystem, with three cost pools foroverhead, includingmixing, decorating, and packaging. How could the company potentially benefit from adopting activity based costing forjobs? What is the downside tochanging? What would yourecommend? Please write in paragraph form with reasonably appropriate grammar and spelling
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