2) Emiley Valley operates a dance studio with childcare and fitness classes. Emiley's budget for the...
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2) Emiley Valley operates a dance studio with childcare and fitness classes. Emiley's budget for the upcoming year is as follows: Emiley Valley's Dance Studio Budgeted Costs and Activities For the Year Ended December 31, 2021 $65,000 29,100 Dance teacher salaries Child care teacher salaries Fitness instructor salaries 41,200 Total salaries 135,300 Supplies (art, dance accessories, fitness) Rent, maintenance, and utilities 25,145 95,900 63,000 27.000 346,345 Administration salaries Marketing expenses Total Other budget information follows: Dance Childcare Fitness Square footage Number of participants Teachers per hour 3,600 5,000 1,555 2,700 560 310 4 Number of advertisements 30 25 18 Instructions I. Under the simple costing Emiley allocates indirect costs based on number of participants. Calculate the budgeted costs of each program under simple costing system. (5) II. Choose a cost driver for the indirect costs and calculate the budgeted cost per unit of the cost driver. (5) Calculate the budgeted costs of each program under activity based costing system. (5) What new information Emiley can get by using ABC? (2) How can Emiley use this information for pricing? What other factors should she consider? (4) III. IV. V. 2) Emiley Valley operates a dance studio with childcare and fitness classes. Emiley's budget for the upcoming year is as follows: Emiley Valley's Dance Studio Budgeted Costs and Activities For the Year Ended December 31, 2021 $65,000 29,100 Dance teacher salaries Child care teacher salaries Fitness instructor salaries 41,200 Total salaries 135,300 Supplies (art, dance accessories, fitness) Rent, maintenance, and utilities 25,145 95,900 63,000 27.000 346,345 Administration salaries Marketing expenses Total Other budget information follows: Dance Childcare Fitness Square footage Number of participants Teachers per hour 3,600 5,000 1,555 2,700 560 310 4 Number of advertisements 30 25 18 Instructions I. Under the simple costing Emiley allocates indirect costs based on number of participants. Calculate the budgeted costs of each program under simple costing system. (5) II. Choose a cost driver for the indirect costs and calculate the budgeted cost per unit of the cost driver. (5) Calculate the budgeted costs of each program under activity based costing system. (5) What new information Emiley can get by using ABC? (2) How can Emiley use this information for pricing? What other factors should she consider? (4) III. IV. V.
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Ans i Since indirect costs are allocated based on number of participants the share of each indirect cost amongst the three activities dance childcare ... View the full answer
Related Book For
Quantitative Analysis for Management
ISBN: 978-0132149112
11th Edition
Authors: Barry render, Ralph m. stair, Michael e. Hanna
Posted Date:
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