I need only introduction and Literature review total of 800 words.

*introduction (500word )

*literature review (300 word )

*5-10 references

Zubair Technologies Co (ZTC) produces and sells Gadgets for children. The company's main customers are Super stores like Lulu and Carrefour that sell a Gadget, which can survive rough handling by children. The Gadgets are individually specified by Stores for each order and pricing has been on a product cost plus basis with a mark-up of 35%. The company uses an absorption costing system based on labour hours in order to calculate the production cost per unit.

The main control system used within the company is the annual budget. It is set before the start of the financial year and variances are monitored and acted upon by line managers.

Further financial information is provided in the below table:

Volume (units)	12,300
		Total OMR‘000
Direct variable costs Material		21,200
Labour		1,890
Packaging and transport		1,200
Subtotal		24,290
Overhead costs
Customer service		3,650
Purchasing and receiving		1,250
Inventory management		1,060
Administration of production		1,350
Subtotal		7,310
Total		31,600

Labour time per unit	2 hours
Data collected for the year
No of minutes on call to customer	420,600
No of purchase orders raised	11,200
No of components used in production	310,800

Order # 5656
Units ordered	40
Direct costs for this order:		OMR
Material		70,328
Labour		6,600
Packaging and transport		3,400

Their activities relating to this order:

No of minutes on call to customer2,604

No of purchase orders raised160

No of components used in production 1,250

Administration of production (absorbed as general overhead)2 Labour hours per unit

The board papers contain a high-level summary of financial information, comparing performance against budget for revenue, costs and profit. The CEO is concerned about the performance information, which is provided in the monthly board papers.

ZTC Key Performance Indicators are profit, profit margin, free cash flow and return on capital employed. Although the CEO acknowledges that the fall in profitability is a concern for ZTC he believes that the company's performance measurement systems should not focus solely on financial information, but also non-financial information such as quality, or flexibility in meeting customer specifications etc.

Required

You being the Management consultant of Zubair Technologies Co (ZTC) have been asked by the management to write a detailed report on evaluation of traditional absorption costing system against Activity Based Costing.

Your report should include the following points with supporting calculations and working notes:

1. An Ideal Introduction to the report which should include relevant literature review

INSTRUCTIONS

• Use of the relevant academic literature to support ideas and issues discussed.The range of academic sources such as texts and journals to support your arguments and comments.
• Any reference to authors and other writers shall be quoted with due acknowledgement in your assignment report using the Harvard Referencing System. For details of Harvard referencing style refer the student’s hand book page 46-47 section7.2..