Activity based budgeting

PQR operates two rail services. The PQ line operated for 20,000 hours last year. It had 200 full time staff. The QR line operated for 39,000 hours last year. It had 300 full time staff. Eight train staff are needed for each journey on both lines. The total overhead for indirect wages is $39m.

An improvement is being planned for train services by the UK Govt. PQR expects this to result in 10,000 more journey for the PQ line. QR line is likely to result in 5,000 journey hours for the QR line. Prepare a budget using ABB.