Mias Animal Shelter performs three services: housing and finding homes for stray and unwanted animals, providing health care and neutering services for the animals, and pet training services. One facility is dedicated to housing animals 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 animal trainers. The trainers work with all of the shelters animals to ensure that they are relatively easy to manage. They also provide dog obedience classes for families who adopt animals.

Estimated annual costs for the animal shelter and its services are as follows: ( in $ )

Director and administration staff salaries : 60,000

Housing services employees salaries : 100,000

Veterinarians and technicians salaries : 150,000

Animal trainers salaries : 40,000

Food and supplies : 125,000

Building-related costs : 200,000

On average, 75 animals per day are housed at the facility, or about 27,375 (75 365) animal 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 animal visits.

One of the administration staff, Eden, just graduated from an accounting program and would like to set up an ABC system for the shelter so that the director can better understand thecost for each of the shelters services. He gathers the following information:

Square metres for each facility:

Housing service : 5,000 sq meters Director and training : 3,000 sq meters

Veterinarian clinic : 2,000 square meters

Percentage of trainer time used in classes : 50%

Supplies used for veterinarian services : $75,000

Question 1: ABC

1. Identify three cost pools and assign costs to them, considering the three cost objects of interest. Determine an activity driver for each cost pool identified. Explain your choice. (10 marks)

2. Using the activity drivers you identified in part (i) calculate the direct cost per unit of activity driver for each pool and explain what the cost per unit of activity driver for each pool means. Show ALL your workings. (10 marks)