Case Study: Jack’s Dog Sanctuary Jack’s Dog Sanctuary performs three services: housing and finding homes for stray and unwanted dogs, providing health care and neutering services for the dogs, and dog training services. One facility is dedicated to housing dogs waiting to be adopted. A second facility houses veterinarian services. A third facility houses the director, administration staff, and several dog trainers. This facility also has several large meeting rooms that are frequently  used for classes conducted by the dog trainers. The trainers work with all the sanctuary dogs to ensure that they are relatively easy to manage. They also provide dog obedience classes for  families who adopt dogs. Estimated annual costs and services are as follows:   $ Director and administration staff salaries 60,000 Housing service’s employees’ salaries 100,000 Veterinarians and technicians’ salaries 150,000 Dog trainers’ salaries 40,000 Food and supplies 125,000 Building-related costs 200,000 On average, 75 dogs per day are housed at the facility, or about 27,375 (75 × 365) dog days in  total. In addition, the trainers offer about 125 classes for about 30 weeks throughout the year. On average, 10 families attend each class. Last year the veterinarian clinic experienced 5,000  dog visits. One of the administration staff, Joan, just graduated from an accounting program and would like  to set up an ABC system for the sanctuary so that the director can better understand the cost  for each of the sanctuary’s services. She gathered the following information:  Square metres for each facility:   Housing service 5,000 m2  Director and training 3,000 m2  Veterinarian clinic 2,000 m2 Percentage of trainer time used in classes 50% Portion of Supplies used for veterinarian services $75,000 Required: i. Determine an activity driver for each cost pool your group identified in and explain  your choice.  ii. Using the activity drivers, you identified in part (i) calculate the direct cost per unit of activity driver for each pool and explain what the cost per unit of activity driver for each pool  means. Show ALL your workings.

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Case Study: Jack’s Dog Sanctuary
Jack’s Dog Sanctuary performs three services: housing and finding homes for stray and
unwanted dogs, providing health care and neutering services for the dogs, and dog training
services. One facility is dedicated to housing dogs waiting to be adopted. A second facility
houses veterinarian services. A third facility houses the director, administration staff, and
several dog trainers. This facility also has several large meeting rooms that are frequently 
used for classes conducted by the dog trainers. The trainers work with all the sanctuary dogs to
ensure that they are relatively easy to manage. They also provide dog obedience classes for 
families who adopt dogs.
Estimated annual costs and services are as follows: 
 $
Director and administration staff salaries 60,000
Housing service’s employees’ salaries 100,000
Veterinarians and technicians’ salaries 150,000
Dog trainers’ salaries 40,000
Food and supplies 125,000
Building-related costs 200,000
On average, 75 dogs per day are housed at the facility, or about 27,375 (75 × 365) dog days in 
total. In addition, the trainers offer about 125 classes for about 30 weeks throughout the year.
On average, 10 families attend each class. Last year the veterinarian clinic experienced 5,000 
dog visits.
One of the administration staff, Joan, just graduated from an accounting program and would like 
to set up an ABC system for the sanctuary so that the director can better understand the cost 
for each of the sanctuary’s services. She gathered the following information: 
Square metres for each facility: 
 Housing service 5,000 m2
 Director and training 3,000 m2
 Veterinarian clinic 2,000 m2
Percentage of trainer time used in classes 50%
Portion of Supplies used for veterinarian services $75,000

Required:

i. Determine an activity driver for each cost pool your group identified in and explain 
your choice. 
ii. Using the activity drivers, you identified in part (i) calculate the direct cost per unit of activity
driver for each pool and explain what the cost per unit of activity driver for each pool 
means. Show ALL your workings. 

 

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