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问答题5.Lesting Regional Authority (LRA) is responsible for the provision of a wide range of services in the Lesting region,which is based in the south of the country ‘Alaia’. These services include, amongst other things, responsibility for residents’ welfare, schools, housing, hospitals, roads and waste management.
Over recent months the Lesting region experienced the hottest temperatures on record, resulting in several forest fires,which caused damage to several schools and some local roads. Unfortunately, these hot temperatures were thenfollowed by flooding, which left a number of residents without homes and saw higher than usual numbers ofadmissions to hospitals due to the outbreak of disease. These hospitals were full and some patients were treated intents. Residents have been complaining for some years that a new hospital is needed in the area.
Prior to these events, the LRA was proudly leading the way in a new approach to waste management, with theintroduction of its new ‘Waste Recycling Scheme.’ Two years ago, it began phase 1 of the scheme and half of itsresidents were issued with different coloured waste bins for different types of waste. The final phase was due to beginin one month’s time. The cost of providing the new waste bins is significant but LRA’s focus has always been on thelong-term savings both to the environment and in terms of reduced waste disposal costs.
The LRA is about to begin preparing its budget for the coming financial year, which starts in one month’s time. Overrecent years, zero-based budgeting (ZBB) has been introduced at a number of regional authorities in Alaia and, giventhe demand on resources which LRA faces this year, it is considering whether now would be a good time to introduceit.
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问答题(c) Using your calculation from (a) and (b) above, explain how activity based costing may help The Gadget Co improve the profitability of each product. (6 marks)
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