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Question 1 (100 marks) ABC Company provides lawn care and landscaping services to commercial clients. It uses activity-based costing to bid on jobs and to evaluate their profitability and reports the following budgeted annual costs: Wages and salaries $360,000 Depreciation $ 72,000 Supplies $120,000 Other overhead $288,000 Total overhead costs $840,000 Peter Wong, the controller of ABC Company, has established four activity cost pools and the following budgeted activity for each cost pool: Activity Cost Pool Estimating jobs Lawn care Landscape design Other Activity Measure Number of job estimates Number of direct labor-hours Number of design hours Facility-sustaining costs that are not allocated to jobs Total Activity for the Year 250 estimates 10,000 direct labor-hours 500 design hours Not applicable Peter estimates that ABC Company's costs are distributed to the activity-cost pools as follows: Lawn Care 70% Wages and salaries Depreciation Supplies Other overhead Estimating Jobs 5% 10% 0% 65% 100% 50% Landscape Design Other 15% 10% 10% 15% 0% 0% 20% 15% Total 100% 100% 100% 100% 15% DEF Office Park, a new development in a nearby community, has contacted ABC Company to submit a tender on landscape design and annual lawn maintenance. An estimation of 40 design hours and 250 direct labor-hours are required for the job. ABC Company has a policy of pricing estimates at 150% of cost. Required: 1. Allocate ABC Company's costs to the activity-cost pools and determine the activity rate for each pool. (62 marks) 2. Estimate total cost for the DEF Office Park job. How much would ABC Company bid to perform the job? (25 marks) 3. (13 marks) ABC Company does 30 landscape designs for its customers each year. Estimate the amount of landscape design cost would be allocated to the DEF Office Park job if ABC Company allocated costs of the Landscape Design activity based on the number of landscape designs rather than the number of landscape design-hours

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