What more info do you need? At this point i should have joined course hero. I have been waiting for days for an answer from you. My question is very well formed and followed by pertinent information. Its 'also on file in Chegg and asked by several students: I am working on ACC 207 Final Project on writing a quantitative analysis with memo to management regarding my recommendation for an optimal costing system to be ethically used by key decision makers. The following chart contains the information necessary for the quantitative analysis part of the memo. it is followed by your expert's answer in part to their recommendation to management. i'm hoping you have a more thorough answer. I tried asking this quetion 3 days ago and they asked for more information. I hope I have included everything you need to help me answer my question.. 50000 UNITS FLEXED 47000 UNITS ACTUAL 47000 UNITS VARIANCES ADV FAV SALES 1050000 987000 991700 4700 VARIABLE -565500 -528750 -621246 92496 FIXED MF -95000 -95000 -94500 500 ADMIN/ SD -298500 -285750 -285750 NET INCOME 91000 77500 -9796 87296 ANALYSIS OF VARIANCES DM CEDAR PLASTIC ACTUAL 248160 37741 ACTUAL X STD 100590F 241A 77500 X 4.5 348750 37500 STD X STD 137250A 2500F 47000 X3X 1.5 211500 47000 X 1 X .75 35000 36660A 2259 F 34401 A DL ACTUAL 332760 55460A ALH X STD RATE 554600 X $5 277300 ACT UNITS X STD HP X STD RATE 4700F 47000 X 12 HRS X $5 282000 50760A 50760 A VARIABLE ACTAUAL 2585 517 F A10340 X .3 3102 102A 10000 X .3 3000 415 F 415 F NO VARIANCES IN ADMIN & S & D SHIPPING 112500 NO VARIANCE 105750 SALES COMM 100000 NO VARIANCE 47000 X 2 94000 . Process costing accumulates costs per various processes- such as direct materials& direct labor that can be directly identified with the process and overheads on the basis of some pre-determined rate based on labor hours or machine hours -as decided while drawing up budgets. This type of costing suits manufacturing processes involving production of identical items of a large volume,where cost identification per unit is both cumbersome and not worth while also. In contrast ,Activity-based costing, as the name suggests, accumulates cost as per each activity involved in the production process. It allocates overheads more precisely than process costing-which is very broad-based-may even allocate unwanted and extraneous costs that are outside the control of that particular process people. It is ABC that can control costs by identifying the costs for that activity and pin-pointing responsisbility/credit for cost variations /otherwise. b. That said, with respect to the above, the management will benefit by switch over to Activity based costing system as Variances are more pronounced with respect to direct expenses than overhead allocation.Tha necessitates a change in the system of cost accumulation and measurement. Going by the above figures, variances are pronounced with respect to materials and labor than overheads. Materials show the maximum price (rate)and efficiency (usage)variances .Here splitiing into various activities like purchase order placement quantity,logistics, consumption of raw materials in production ,etc. can pin-point the area of lacunae. Similarly labor rates with respect to skilled and unskilled labor & establishment of activities like labor procurement ,deployment or proper job allocation may help in minimising errors.Presently,labor cost is also showing negative variances. As figures are showing variances from the flexible budgets-contribution margin is less pushing up the break-even sales figure- the management stands to gain by switching over to ABC-wherein splitting up into activities -will lead to optimal performance- with less variances. c. Ethical considerations in using this system of cost allocation may be- establishing numerous cost pools and activites, sometimes overlapping and interfering a too-hard task master for the employees to live upto the figures given by them time-consuming, robbing the productive time of employees employees may fear being held responsible for costs over which they have no control. d. For the aforesid reasons- the purpose for which ABC is resorted to- cost control-at every activity level- may not be possible for indirect costs over which the activity personnel have no control.this may be a disincentive to efficient functioning of the employees.Hence care must be taken and detailed analysis of the components of all costs pertaining to that activity must be done -before establishing an activity center.