Question 1: I. Identify the problems associated with the product costing system currently used by AClass Plastics and for each problem explain why it is a problem drawing from the facts of the case. II. For each problem you have identified, explain how AClass plastics will overcome it (DO NOT simply explain the benefits / disadvantages of ABC to explain how AClass plastics will overcome each of the problems, you MUST use the facts from the case to back up your discussion to be awarded marks). III. Your discussion should address the general principles underlying each approach and the advantages of ABC to AClass Plastics. You will not be awarded marks for simply copying the information from the text. Make sure to use facts from the case to back up your discussion (6 marks).

Question 2:

I. What is the unit cost of each type of product under Anna Lyst's proposed ABC approach? II. How does this compare with the unit product costs under the company's existing costing system? III. Show all calculations. (Note: In order to highlight how the company's product costs are calculated under an ABC approach, you should include a diagram in your report similar that shown on the next page.) IV. Explain why the product costs under an ABC approach are different to that under the existing costing system. V. You should also present two statements of financial performance (profit statements): one based upon the existing costing system and the other under the proposed ABC system. Show all calculations (16 marks).