You are a Controller at a manufacturing company. You have been going over the numbers for manufacturing overhead and you don't think the company is using the best method to assign it. Recently you heard about activity based costing and have done research into it. You believe that it would be in the company's best interest to switch from its traditional method for assigning manufacturing overhead to activity based costing. Write a memo to the CEO explaining the benefits the company will see from this switch.

When you reply: You are the CEO and you don't think activity based costing is as good as its made out to be. Write a memo back to the Controller with the issues you believe the company would have if they made the switch.