1. Increasing the number of indirect-cost pools is guaranteed to sizably increase the accuracy of product or service costs.do you agree? Support your anser using examples
2. The application of activity based costing doesn't apply in service industries. Service industries don'tmaintain any inventory and therefore ABC will not add any value to the organisation. Do you agree? Support your answer using examples.
3. FrancescaLorie. a production manager, states that "instead of allocating budgeted manufacturing overheads to jobs, we should straight away charge actual overheads. This would avoid the constant problem of under applied and over applied overheads and therefore no adjustment would be necessary. Plus instead of consuming our valuable resources for this activity we can utilise them else here. This would definitely improve profitability in the long run" write a memo to Francesca to clarify her concerns
4. Why might an analyst examining variances in the production area look beyond that business function for explanation of those variances? Support your answer using examples.