1. A service company implements ABC for cost allocation: Information Technology $400,000 (600 projects), Customer Service $250,000 (400 customers), Marketing $150,000 (300 campaigns).
   • Requirements:
     • Calculate the activity rate for each cost pool using ABC.
     • Allocate costs to different service departments based on activity usage.
     • Prepare a cost allocation report considering activity-based costing principles.
     • Recommend strategic decisions based on ABC insights to optimize cost efficiency.
     • Discuss how ABC enhances resource allocation and profitability analysis in service industries.