1. Theta Construction

Scenario: Activity-Based Costing (ABC)

Data: Theta Construction uses activity-based costing to allocate overhead costs. The company identified the following cost pools and cost drivers:

• Cost Pool 1: $300,000, Cost Driver: Number of Inspections, Driver Quantity: 1,500
• Cost Pool 2: $200,000, Cost Driver: Square Feet of Construction, Driver Quantity: 100,000

Requirements: Allocate overhead costs to Theta Construction's projects using activity-based costing. Calculate the overhead cost per unit for each cost pool. Analyze the cost allocation results and discuss how ABC improves cost accuracy and decision-making in the construction industry.