The financial director of Norman and Co Ltd. is considering replacing the existing traditional system with activity based costing but is unsure exactly what would be involved. He is also determined to keep costs to a minimum and does not want any new system to involve a lot of extra work or expenditure._x000D_
Required:_x000D_
Prepare a report for the financial director which must address the following:_x000D_
1. An appraisal of the existing traditional system. (What is the Cost per unit of X and Y under Traditional Absorption Costing) (10 marks for calculation and 15 marks for analysis)_x000D_
2. A broad outline of an ABC system with an explanation as to why it might be desirable. (15 marks)_x000D_
3. Your recommendations for ABC implementation and any problems you foresee bringing in ABC for Norman and Co. Ltd. What is the Cost per unit of X and Y under ABC (20 marks for calculation and 20 marks for analysis)_x000D_
4. Your advice on whether ABC is viable for Norman and Co. Ltd., given the financial directors concerns. (10 marks)_x000D_
5. In addition 10 marks will be awarded for the style and presentation of the report._x000D_
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