The City Museum (TCM) collects and displays historical artifacts from the local area. One of its...

 

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The City Museum (TCM) collects and displays historical artifacts from the local area. One of its services is dedicated tours. TCM offers dedicated tours to two groups: local students and donors. TCM has two coordinators for these tours-one for the student tours and one for the donor tours. Data for the quarter on the two groups follow. Number of visitors Number of tours Student Tours Donor Tours Total 1,500 75 750 2,250 90 165 The operational costs associated with the tours have been collected and are presented in the following table. Refreshments, information, and audio guides Tour leaders salaries and benefits Coordinator salaries and benefits (@ $18,975 per coordinator) Total Required: a. TCM currently applies operational costs of the tours to the two types (student and donor) based on the number of visitors. What is the operational cost per visitor based on the costing system currently used? b. TCM is considering adopting an ABC system to evaluate the costs of the two types of tours. If they did so, they would use the following cost drivers: number of visitors for refreshments, information, and audio guides, and number of tours for tour leader salaries and benefits. Compute the cost driver rates for the refreshments, information, and audio guides and tour leaders. c. Match each of the three activity-drivers to one of the levels of the cost hierarchy. The City Museum (TCM) collects and displays historical artifacts from the local area. One of its services is dedicated tours. TCM offers dedicated tours to two groups: local students and donors. TCM has two coordinators for these tours-one for the student tours and one for the donor tours. Data for the quarter on the two groups follow. Number of visitors Number of tours Student Tours Donor Tours Total 1,500 75 750 2,250 90 165 The operational costs associated with the tours have been collected and are presented in the following table. Refreshments, information, and audio guides Tour leaders salaries and benefits Coordinator salaries and benefits (@ $18,975 per coordinator) Total Required: a. TCM currently applies operational costs of the tours to the two types (student and donor) based on the number of visitors. What is the operational cost per visitor based on the costing system currently used? b. TCM is considering adopting an ABC system to evaluate the costs of the two types of tours. If they did so, they would use the following cost drivers: number of visitors for refreshments, information, and audio guides, and number of tours for tour leader salaries and benefits. Compute the cost driver rates for the refreshments, information, and audio guides and tour leaders. c. Match each of the three activity-drivers to one of the levels of the cost hierarchy.