Holly's Dog Sanctuary performs three services: housing and finding homes for stray and unwanted dogs, providing health care and neutering services for the dogs, and dog training services. One facility is dedicated to housing dogs waiting to be adopted. A second facility houses veterinarian services. A third facility houses the director, administration staff, and several dog trainers. This facility also has several large meeting rooms that are frequently used for classes conducted by the dog trainers. The trainers work with all the sanctuary dogs to ensure that they are relatively easy to manage. They also provide dog obedience classes for families who adopt dogs.

Estimated annual costs and services are as follows:

Director and administration staff salaries Housing services employees salaries Veterinarians and technicians salaries Dog trainers salaries

Food and supplies Building-related costs

$

60,000 100,000 150,000 40,000 125,000 200,000

On average, 75 dogs per day are housed at the facility, or about 27,375 (75 365) dog days in total. In addition, the trainers offer about 125 classes for about 30 weeks throughout the year. On average, 10 families attend each class. Last year the veterinarian clinic experienced 5,000 dog visits.

One of the administration staff, Joan, just graduated from an accounting program and would like to set up an ABC system for the sanctuary so that the director can better understand the cost for each of the sanctuarys services. She gathered the following information:

Square metres for each facility: Housing service Director and training Veterinarian clinic

Percentage of trainer time used in classes Portion of Supplies used for veterinarian services

5,000 m2 3,000 m2 2,000 m2

50% $75,000

Required:

• Identify two cost pools and assign costs to them, considering the three cost objects of interest. Explain your choice for each cost pool identified and how the costs are assigned to each of the cost objects. (Hint: Take the services provided into account when identifying a cost object. Assign the costs based on its traceability to the cost object).