Discuss the issues that may arise in using the current absorption costing system based on labour hours. Discuss the appropriateness of changing to an activity-based costing (ABC) system for product costing and pricing for the business.
From the statements above it can be seen that sales revenue has increased over the last year and is expected to continue to grow by approximately 6% per year in the future. Approximately 30% of the cost of sales are related to fixed production overheads while the remaining 70% are classed as variable and directly […]