The Canters Riding Centre is based in Cheshire. It offers three types of course. These are Pony Trekking, General Lessons and Advanced Riding Skills. The following budgeted figures relate to the year 2014.

The centre currently uses the total number of participant days per year to absorb fixed overheads.
Budgeted fixed overheads for 2014 are expected to be as follows (£):

Required:
a Calculate the overhead absorption rate used by the centre.
b Calculate the cost of each course using traditional absorption costing.
c Reallocate the overheads using the most appropriate cost driver available, and calculate the cost of each course using ABC.
d Briefly discuss the advantages and disadvantages of ABC over traditional absorption costing.

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No. of courses Staff hours Brochures per year per course per course Pony trekking 40 25 30 General lessons 3000 2 1 Advanced riding skills 100 2 50 Admin events Insurance clauses per course per course 10 14.15 4 1.5 6 5