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Particulars Fundamentals Revenue Cost of Goods sold Pastry and Dairy Products cakes Meat Products 55000 60000 62000 35000 45000 45000 11000 15100 10500 Store
Particulars Fundamentals Revenue Cost of Goods sold Pastry and Dairy Products cakes Meat Products 55000 60000 62000 35000 45000 45000 11000 15100 10500 Store support Activities (Cost allocation base) Ordering (purchasing order) 30 25 13 Delivery (Deliveries) 98 36 28 Shelf-stocking (hours) 183 166 24 Customer support (item sold) 15500 20500 7900 Under its simple costing system, AM allocated support costs to products at the rate of 30% of cost of goods sold. Require: 1. Elaborate development, challenges and application of activity-based costing in detail (500 words; minimum five references) 2. Use the simple/traditional costing system to prepare a product-line profitability report for AM. 3. Use the ABC system to prepare a product-line profitability report for AM. 4. What new insights does the ABC system in requirement provide to AM managers (300 words)? 5. "ABC system motivates sustainability and better decision making in organization" would you agree? Justify (500 words; minimum five references).
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