You've recently been appointed as the management accountant for Wagga Wagga Veterinary Hospital (WWVH) that offers two primary services, farm animal services and pet care services. You have been asked by the managing director to advice on any obstacles that could be impeding the effectiveness of cost management and performance management systems at WWVH. During your preliminary analysis, you have found out that providing veterinary care to farm animals requires travel to the farm animal (house calls), while veterinary care to pets generally requires that pet be brought into the clinic. As part of your discussions with senior management to determine the contribution that each of these two types of services make to overall profit, one director argues for allocating overhead using activity-based costing while the other director argues for a simpler overhead cost allocation based on direct labour hours. The directors agree to use next year's budgeted data, for analysis and comparison purposes. You have collected the following overhead data to develop the comparison: Activity cost pool Cost Driver Estimated overhead ($) Total expected cost drivers Expected use of drivers by service Farm Animals Pets Drug treatment Treatments 64000 4000 1800 2200 Surgery Operations 65000 800 200 600 Travel Mileage 28000 28000 26000 2000 Consultation Appointments/calls 33000 3000 600 2400 Accounting/Office Direct labour hours 30000 5000 2000 3000 Boaridng and grooming 100% pets 40000 260 000 Following discussions with the senior management team, you've made the decision to implement both activitybased costing and the balanced scorecard. Required: 1. Comment on the comparative overhead costs assigned to the two services under both traditional costing and activity-based costing and provide a rationale for your preference for activity-based costing at WWVH (include calculations to support your recommendation) (10 marks) 2. Describe how the managers of WWVH might use this new activity-based system to identify nonvalueadded activities. (4 marks) 3. Draft a potential mission, vision, and values statement for WWVH. Explain how you decided what should be included in the statements. (6 marks) 4. Formulate a balanced score card for WWVH (Use the following template) (20 marks) Perspectives Strategic Objectives Measures Targets Initiatives