QUESTION 1 (35 marks) Outdoor Amusement Fun is an amusement park located in Vancouver, British Columbia. It is organized into 6 departments: arcades and shows, food and beverage, rides, communications human resources, and maintenance. Outdoor Amusement Fun is implementing an ABC system to allocate the costs of the service activities (communications, human resources, and maintenance) to product-line departments (arcades and shows, food and beverage, and rides). Thus, the product-line departments are the cost objects. The total costs and cost drivers for each service activity are: Activity Communication Total Cost $16,000 Cost Driver Number of specific memos prepared and distributed Number of employees Square metres Human resources Maintenance 20,000 18,000 Information regarding cost drivers and allocation bases is as follows: Arcades & shows Food & beverage Rides Communications Human resources Maintenance Number of Employees 20 50 30 10 10 25 Square Metres 5.000 7,000 6,000 1,000 1,000 1,000 Number of Specific Memos Prepared & Distributed 6 4 6 4 3 1 Direct costs and revenues for each product-line department are as follows: Direct Costs Revenues $50,000 125,000 150,000 Arcades & shows Food & beverage Rides $8,000 6,000 4,000 Required a) Calculate the allocation rate for each service activity. (10 marks) b) Interpret the allocation rate for each service activity (i.e., explain what it means). (5 marks) c) Calculate the total service activity costs allocated to each product-line department. (10 mark d) Calculate the operating profit (revenues - direct costs - allocated costs) for each product-lir department. (10 marks)