Brookside Property Management is a property management service company for small shopping malls that uses ABC to estimate costs for pricing and other purposes. The owner of the company believes that costs are driven primarily by the area of outdoor maintenance (parking lots, side- walks, and gardens), the area of indoor tenant space in the shopping mall, the distance to travel to the shopping mall, and the number of shopping malls managed. In addition, the costs of managing the indoor tenant space depend on whether the tenants are located on the main level or other levels of the mall. Accordingly, the company uses the five activity cost pools listed below:
Activity Cost Pool Activity Measure
Management of outdoor areas ........... Square metres of outdoor areas
Management of indoor mall space—main level ... Square metres of main level mall space
Management of indoor mall space—other levels ..... Square metres of non–main level mall space
Travel to jobs .............. ................. Kilometres
Customer billing and service ................ Number of shopping malls
The company has already carried out its first-stage allocations of costs. The company’s annual costs and activities are summarized as follows:
Parker Hills Shopping Mall is one of Brookside’s oldest clients. Details concerning the mall’s layout, outdoor space, and distance from Brookside’s head office are as follows:
1. Compute the activity rate for each of the activity cost pools.
2. Determine the total overhead cost that would be assigned to the Parker Hills Shopping Mall using the ABC system.

  • CreatedJuly 08, 2015
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