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please solve it and explain each part if possible 5-34 Choosing cost drivers, activity-based costing, activity-based management. Annie Warbucks runs a dance studio with childcare
please solve it and explain each part if possible
5-34 Choosing cost drivers, activity-based costing, activity-based management. Annie Warbucks runs a dance studio with childcare and adult fitness classes. Annie's budget for the upcoming year is as follows: Annie Warbuck's Dance Studio Budgeted Costs and Activities For the Year Ended June 30, 2010 Dance teacher salaries $62,100 Child care teacher salaries 24,300 Fitness instructor salaries 39,060 Total salaries Supplies (art, dance accessories, fitness) Rent, maintenance, and utilities Administration salaries Marketing expenses Total $125,460 21,984 97,511 50,075 21,000 $316,030 Other budget information follows: Dance 6,000 1,485 Childcare 3,150 450 Fitness 2,500 270 Total 11,650 2,205 Square footage Number of participants Teachers per hour Number of advertisements 3 3 1 7 26 24 20 70 Required 1. Determine which costs are direct costs and which costs are indirect costs of different programs. 2. Choose a cost driver for the indirect costs and calculate the budgeted cost per unit of the cost driver. Explain briefly your choice of cost driver. 3. Calculate the budgeted costs of each program. 4. How can Annie use this information for pricing? What other factors should she considerStep by Step Solution
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