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3. You have been asked to determine the labour and overhead costs for the Small, Medium and Pump Naturisan bottles using the original costing approach (as outlined by Peita), which resulted in the Small, Medium and Pump bottle unit costs for P&B Natural Co, in Figure 3. Show all calculations.

Peita and her team are working on designing and using the new costing system based on the principles of ABC. As you are helping them in designing this new costing system you are required to:

(i) Describe in detail the elements of this new costing system and explain/justify the activity cost pools and activity cost drivers included.

(ii) Determine the conversion cost per bottle for each of the Naturisan bottle sizes (Small, Medium and Pump) by preparing a bill of activities for each size.

Discuss in detail your ABC results for P&B Natural Co with an emphasis on analysing the activity costs and also highlighting the differences to the original costing approach.

Based on your project team's extended research, on competitive strategy and ABM, along with your team's ABC analysis for P&B Natural Co, discuss in detail what information the senior management team may need to consider before making product line decisions.