Choosing cost drivers, activity-based costing, activity-based management. Annie Warbucks runs a dance studio with childcare and adult fitness classes. Annie's budget for the upcoming year is as follows:

Other budget information follows:

Required1. Determine which costs are direct costs and which costs are indirect costs of different programs.2. Choose a cost driver for the indirect costs and calculate the budgeted cost per unit of the cost driver. Explain briefly your choice of cost driver.3. Calculate the budgeted costs of each program.4. How can Annie use this information for pricing? What other factors should sheconsider?

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Annie Warbuck's Dance Studio Budgeted Costs and Activities For the Year Ended June 30, 2010 Dance teacher salaries $62,100 Child care teacher salaries 24,300 Fitness instructor salaries 39,060 Total salaries $125,460 Supplies (art, dance accessories, fitness) 21,984 97,511 Rent, maintenance, and utilities Administration salaries 50,075 Marketing expenses 21,000 $316,030 Total