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que s tion f r om the a s sociation of charte r ed certified a cc ountants pi l ot p 737060

Que s tion f r om the A s sociation of Charte r ed Certified A cc ountants, Pi l ot P aper 2.4, Financial Management and Cont r ol.

a Discuss the conditions under which the introduction of ABC is likely to be most effec tive, paying particular attention to:

product mix

the significance of overheads and the ABC method of charging costs

the availability of information collection procedures and resources, and

other appropriate factors. (17 marks)

b Explain why ABC might lead to a more accurate assessment of management perform ance than absorption costing. (8 marks)

(Total marks = 25)

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