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BUSINESS 294? Assignment #4-Horses ?R Us (HRUS) Co. is a horse grooming and training company




Question;bUSINESS 294? Assignment #4Question [26 marks];Horses ?R Us (HRUS) Co. is a horse grooming and training company. They also supply horses;to movie productions to star in various movies. They have experienced horse handlers, horse;groomers and provide horses and all other services needed to care for and transport the;horses.;Over the weekend of January 6th and 7th, HRUS had 2 different jobs. The first job was to;provide their services to a horse SHOW in Coquitlam. The second job was to provide their;services plus some of their very highly trained horses to a MOVIE company in Vancouver.;Both the SHOW and the MOVIE were ?open? from 10 am to 6 pm.;The following is a list of the total (incremental) costs incurred for the weekend;Handlers $9,600;Groomers 5,500;Horse Food 948;Veterinarian 2,800;Transportation 8,950;Supervision 1,960;Total $29,758;Additional information follows;The SHOW took place on January 7th (Sunday). The MOVIE took place on January 6th and 7th;(Saturday and Sunday).;HRUS provided the SHOW with handlers and groomers for 25 horses owned by the clients.;The clients delivered their horses to HRUS? stables on the morning of January 7th. HRUS;supplied 8 horses to the MOVIE and serviced those horses. Every horse has a handler.;Inexperienced handlers were used for the SHOW. Inexperienced handlers are paid $20/hour.;Experienced handlers were sent to the MOVIE with the horses. They are paid $35/hour. Due;to the stunts the horses have to perform for the MOVIE, the handlers have to spend two extra;hours calming the horses down at the end of the day.;The SHOW is 25 miles away from HRUS? stables and offices. The MOVIE is 10 miles away;from HRUS? stables.;HRUS? groomers were used for both events. They are paid $500 per day for grooming;services, and each groomer can care for 6 horses per day. However, the horses in the MOVIE;required more time to groom, so each groomer took twice as long on the MOVIE horses. (All;groomers work the same hours per day. Different groomers are used at each event.);HRUS will supply ?horse treats? only, for the client?s horses used in the SHOW. Each horse;usually eats one bag of treats a day. HRUS? horses used in the MOVIE are fed bales of hay;and treats. Each horse gets 4 bales of hay (per day) and will eat 20% less treats (per day);than the horses at the SHOW. Each bag of treats that is opened during the day is thrown out if;it is not eaten (by any horse). Bales of hay cost $7.50 per bale. Treats are $12 per bag.;When there is an event, government regulations require a separate veterinarian to be on call;throughout each event (from 10 am to 6 pm). The vets charge by the hour.;2;Transportation costs include the use of their vans to transport the horses, food, handlers and;equipment to the events. In addition to carrying the food and equipment, the vans can carry a;maximum of 6 handlers and 6 horses each. When the event goes on for more than a day, the;handlers need to use a cab to get home and return to the event the next day as the vans are left;at the event?s location overnight. The cabs hold a maximum of 5 riders. The cab ride from the;stables to Vancouver is $30 per trip and the cab ride from the stables to Coquitlam is $15. The;cost of cabs is included in transportation costs. (The groomers do not use the cabs.);HRUS Co. employs supervisors who work on the weekends (Saturday and Sunday). The;supervisors spent 2 hours at the MOVIE over the weekend and 3 times as long at the SHOW;the supervisors? remaining time on the weekend was spent at the stables. The supervisors;normally work from 10 am to 6 pm (and each supervisor gets paid the same amount).;Required;a) Assuming that handler hours are used to allocate ALL costs, how should the weekend?s;total costs ($29,758) be allocated between the two events?;b) Provide two reasons why using handler hours to allocate all the costs is not the best;approach.;c) Using ?activity based costing? (?user fee approach?), calculate how much of the $29,758;should be allocated to the SHOW and how much should be allocated to the MOVIE event?;Where applicable, ?directly trace? specific costs to each event. Any ?facility;level/organization sustaining costs? should be allocated using handler hours.;ONLY SUBMIT THE PAGES THAT START WITH ?NAME? (pages 3?6)


Paper#52021 | Written in 18-Jul-2015

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