Question: 2. What will be the consequences on the competitive situation of the company if the management decides to switch from the existing costing system

2. What will be the consequences on the competitive situation of the company if the management decides to switch from the existing costing system to: I. a contribution margin approach where overhead costs are treated as common costs, (3 marks) II. a traditional costing system that uses machine hours to allocate the overhead costs. (3 marks) (You should show calculations to support your argument)

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