A. Using the simple costing system, what is the cost per
kilogram of potato cuts produced by PS?
B. Calculate the cost rate per unit of the cost driver in:
ii. cutting and
iii. packaging activity areas.
C. Suppose PS uses information from its activity cost rates to calculate costs incurred on retail potato cuts
and institutional potato cuts. Using the ABC system, what is the cost per kilogram of:
i. retail potato cuts and
ii. institutional potato cuts?
D. Comment on the cost differences between the two costing systems in 1 and 3. How might PS use the
information in requirement 3 to make better decisions?
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