You need to prepare a number of documents

You are a manager at PopUp Company, who manufactures toaster ovens. Your company produces two types of toaster ovens: basic and deluxe. PopUp Company currently uses a traditional unit-based costing system, however, you feel strongly the company should switch to an activity-based costing system. You believe this change would provide you more accurate costing information, which would allow for better strategic decision making. You need to prepare a number of documents in order to convince the CFO to change the current cost management system used by your company.

Part 1:

1. Write a 2-3 page report, using at least 1 reference from the Keiser University Library, comparing the traditional and activity-based cost management systems. Give advantages and disadvantages of each and discuss how these concepts will relate to PopUp Company.

2. Part 2:

Prepare a 2-3 page memo addressed to the CFO summarizing your findings, and why you believe the activity-based costing method gives you more useful information to make decisions for the company. Include in the memo at least 4 ratios that you feel highlight your position that activity-based costing is more useful.

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