It is notable that the sponge cake results from the existing costing system were overestimated by $0.18 whilst the Danish was underestimated by $2.11. This creates an insignificant variation of 4.88% lower in sponge cake production while 48.17% significantly higher in Danish. The reason is that both costing systems allocate overhead costs based on different cost pools and cost drivers (Horngren et. al. 2014). The current costing system has allocated all overhead costs into a cost pool using only one unit-based cost driver, i.e., the number of products manufactured. Therefore, as in Cambden Cakes, high-volume products are overcosted and low-volume products are undercosted because all production costs are treated as homogeneous in current costing systems. ABC systems, in contrast, use 22 activity cost pools and 11 different cost drivers for different activities. Subsequently, it represents precisely the cause-effect relationship between the activity and the cost and therefore the costs are allocated more accurately (Horngren et. al. 2014). Costs are clearly allocated based on consumption or demand for individual products