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EE Sdn Bhd is a renowned manufacturing firm for the past 20 years. Recently, it has made some changes on how things work inside the organization in order to take advantage of the global market. Major process in the production has become more capital intensive and automated. Existing workers are being given on the job training to increase high skilled and educated workforce. However, the company is still implementing on the traditional based costing which result in unconvincing financial position. The chief financial officer (CFO) even stated "The traditional system is not useful in identifying problems". Required:
Problem a. As the accountant of the company, you have proposed for the company to implement Activity Based Costing (ABC). Justify three (3) reasons why it is suitable for EE Sdn Bhd.
Problem b. Briefly discuss two (2) likelihood of employee acceptance if ABC is implemented.
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