1. An IT services company allocates costs: Information Technology $300,000 (500 projects), Customer Support $200,000 (300 customers), Sales & Marketing $150,000 (200 campaigns).
   • Requirements:
     • Apply the revenue recognition principle to determine when revenue should be recognized for service activities.
     • Calculate the activity rate for each cost pool using ABC.
     • Allocate costs to different service activities based on revenue recognition timelines.
     • Prepare a cost allocation report with revenue recognition implications.
     • Recommend improvements in cost allocation and revenue recognition practices based on ABC insights.