=+10-24 KK Activity-based budgeting OBJECTIVE 3 The Dickson store of Independent Supermarkets (IS), a chain of small neighbourhood grocery stores, is preparing its activity-based budget for January 2014. IS has three product categories: soft drinks, fresh produce and packaged food. The following table shows the four activities that consume indirect resources at the Dickson store, the cost drivers and their rates, and the cost-driver amount budgeted to be consumed by each activity in January 2014.

1 2

3 4

5 6

7 A B C D E F Activity Cost driver Soft drinks Fresh produce Packaged food Ordering Number of purchase orders Delivery Number of deliveries Shelf-stocking Hours of stocking time Customer support Number of items sold January 2014 January 2014 budgeted budgeted amount of cost driver used

$

cost-driver rate 0.18 14 19 94 10 750 24 62 172 34 200 14 12 16 4 600

$90

$82

$21 Required 1 What is the total budgeted indirect cost at the Dickson store for January 2014? What is the total budgeted cost of each activity at the Dickson store for January 2014? What is the budgeted indirect cost of each product category for January 2014?