2) TTM Sdn Bhd has two major clients which they advise on strategy.

One is a large profit-making

company and the other, a small not for profit agency. The fee that TTM charges is based on cost plus
a margin. In deciding how to allocate its overhead to its clients, TTM decides to use the base that
allocates the higher amount to the profit-making company as the company would be better able to
bear the charges. Advise whether this is ethical and support your answer with appropriate reasons for
your decision. Advise a possible basis for allocation to the profit making company. (3 marks) 3) From
the details in the case study, as a business analyst, prepare a report in the form of a memo to your
manager, using the rubric provided. Incorporate the answers to the three criteria (a), (b) and (c) as
well as (d) and (e) below on the two service operations: a) Traceability of costs and revenues b)
Allocation base of overheads c) Decision on pricing and product mix From the analysis of (a), (b) and
(c) above on the two service companies, advise for each of the two companies: d) The necessity of
stock valuation e) Costing method (14 marks) END OF PAPER- Page 10 of 10