Exercise $7-5$ Compute Activity Rates and Assign to a Cost Object $[$LO$2,$ LO$3]$

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, sidewalks, 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:

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Activity Cost PoolActivity MeasureManagement of outdoor areasSquare metres of outdoor areasManagement of indoor mall space$$main levelSquare metres of main level mall spaceManagement of indoor mall space$$other levelsSquare metres of non$$main level mall spaceTravel to jobsKilometresCustomer billing and serviceNumber of shopping malls

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The company has already carried out its first$-$stage allocations of costs. The company$$s annual costs and activities are summarized as follows:

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Activity Cost PoolEstimated Overhead CostExpected ActivityManagement of outdoor areas$$69,850127,000$square metres of outdoor areasManagement of indoor mall space$$main level$$114,400104,000$square metres of main level mall spaceManagement of indoor mall space$$other levels$$307,500246,000$square metres of non$$main level mall spaceTravel to jobs$$6,60022,000$kilometresCustomer billing and service$$13,8008$shopping malls

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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:

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Activity Cost PoolTotal Activity for Parker Hills MallManagement of outdoor areas$16,000$square metres of outdoor areasManagement of indoor mall space$$main level$25,000$square metres of main level mall spaceManagement of indoor mall space$$other levels$0$as mall only has one levelTravel to jobs$2,500$kilometres travelledCustomer billing and service$1$shopping malls

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Required:

$1.$ Compute the activity rate for each of the activity cost pools. $($Round your answers to $2$ decimal places.$)$

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$2.$ Determine the total overhead cost that would be assigned to the Parker Hills Shopping Mall using the ABC system. $($Round your answers to $2$ decimal places.$)$

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