What recommendations would you make to the store manager based on the results of the activity-based costing analysis? The recommendation is that the organization switch to method. With this method, the product lines are assigned indirect costs based on their consumption of the activities that give rise to the costs relative cost of merchandise relative sales revenue . The current accounting technique masks the lower cost of merchandise of one or more departments masks the lower profitability of one or more departments masks the lower revenues of one or more department because it accurately considers the activity usage assumes all indirect costs are driven by the dollar amount of merchandise sold . By adopting ABC broad costing process costing simple costing , management can evaluate the costs of operating the three product lines and make more informed pricing and product mix decisions