Question 7 ABC Costing

2. Estimate the cost of the two-day course, using activity based costing. Provide your final answer rounded to the nearest whole number [10 marks]. 3. Which cost out of those estimated in 1) and 2) above would provide a more reliable basis for cost-plus pricing? Explain your answer [5 marks].QUESTION 7: ABC costing [20 marks] LeadME, is training company that provides management development training courses across Australia. It offers two training packages: a two-day short course (covering leadership skills, managing change and people management) and a five-day course (covering strategic management, supply chain management and performance measurement). At the end of the financial year, Legd VS's management accountant reviewed the company's total costs with a view to set the prices for the coming year. Over the past 12 months the company ran 30 two-day courses, with an average of 50 participants and 50 five-day courses with an average of 25 participants. The total costs amounted to $943 000. The following activities and costs for last year: Activity Activity Cost Activity Driver Quantity of Activity Driver Advertise Course $40 000 Number of courses BO Hire Presenter 5600 000 Number of days 310 Hire premises $38 000 Number of days 310 Produce handouts $40 000 Number of participants 2 750 Provide lunch $225 000 Number of person days 13 0DO Total Costs $943 000 Required: 1. Estimate the cost of the two-day course using an 'average cost per day' approach. Provide your answer to the nearest whole number [5 marks]