(a)[6]
Calculate the unit selling price for Product A.
(b)[5]
Calculate the change in selling price of 1 unit of Product A that would result if option 1 were put into effect.
(c)[5]
Calculate the change in selling price of 1 unit of Product A that would result if option 2 were put into effect.
(d)[7]
Advise the directors whether they should implement either option 1 or option 2. Justify your answer.
(e)[2]
Suggest two reasons why the directors chose to use activity based costing (ABC) rather than traditional costing methods when setting the selling prices.