Q1. Discuss with suitable examples why activity-based costing (ABC) is better than the traditional costing system. Provide a suitable numerical example of ABC in the manufacturing sector and show all the necessary calculations required under the ABC system.

(3 Marks)

Note: Your answer must include suitable numerical examples showing all the calculations of the ABC system. You are required to assume values of numerical examples of your own and they should not be copied from any sources. (Chapter 7)