Question 1 Peter Pan Dance Studio (PPDS) runs three dance programs: (1) for primary students; (2) for high school students; and (3) for university students. PPDS has developed a reputation as a top dance studio in Victoria. PPDS has achieved this status because it constantly re-examines its processes. PPDS's budget for 2013 follows: Professional salaries: 16 dance teachers x $80000 08 teacher assistants - level A x $62000 08 teacher assistants - level B x $59000 Total professional salaries Supplies (dance accessories) General overhead Total $1,280,000 496,000 472.000 $2,248,000 225,000 785,000 $3,258,000 PPDS has been using a single, organization-wide overhead allocation rate. Alan Blue, the management accountant of PPDS believes that the studio can make better process improvements if it uses more disaggregated cost information. He is keen on determining the cost of each dance program. Blue complied the following data describing employee allocations to individual programs: (1) Program for (2) Program for Primary Students High School Students (3) Program for University Students 3 3 6 3 7 2 Dance teachers Teacher assistants level A Teacher assistants - 3 level B 3 2 Blue has recently become aware of activity-based costing as a method to refine costing systems. He is planning to apply this technique and collected the following information: General overhead costs consists of: Rent, maintenance and utilities Administrative salaries Marketing expenses Total $290,000 345,000 150,000 785,000 Administrative salaries and consumption of supplies depend on the number of participants in the programs. Rent, maintenance and utility costs depend on square meters of space occupied by each program. (Cont'd on next page)