Total Overheads = £200,000
Total Machine Hours = 100,000
You are required to calculate the unit costs of the vegan and non-vegan meals using:
• Traditional costing using machine hours as the basis of allocation of costs and
• ABC system
• Traditional costing using machine hours as the basis of allocation of costs and
• ABC system
In addition, you are also required to:
• Discuss the importance of accurate costing in supporting the financial decision process
• Compare the traditional costing system to the ABC system and
• Recommend, with reasons, which of the two costing systems is most appropriate for the airline sector
Fig: 1
Fig: 2