Reference no: EM132751216

You are a Management Accounting Intern, at XYZ Tools Private Limited, a newly set-up, small manufacturer of custom designed and developed precision tools, for large machine shops. Being in the jobbing business, the company bids for jobs and executes them. Currently it captures costs by department and accounts for stores and raw material inventories.

• Your role is to suggest improvements to the Cost Accounting system. You are about to make a recommendation to introduce a Product Costing System. When you sound out the Financial Controller, he says, "We have just one Accountant and think introducing a product costing system is a complete waste of time"

Problem 1: Give a short justification, identifying four reasons for your recommendation.