| M4A1 Discussion: |
| Template for Module 4A1 Discussion: Use this template to post elements as they are discussed. Fill in the yellow boxes. |
| Areas in Yellow Highlight are entry cells. All other cells are calculations |
| a. Calculate the amount of overhead allocated to small and large advertising campaigns under existing methods |
| b. Apply activity-based costing to calculate the cost per cost driver for each of the cost pools |
| c. Use the costs per cost driver to calculate the activity-based overhead applicable to small and large campaigns |
| d. Calculate the percentage to be added to direct advertising costs to recover overhead costs under activity-based costing |
| e. Discuss how the calculations on this form work to provide ABC analysis |
| a. Current allocation of costs over small/large ‘won’ campaigns |
| Campaign mix | Direct advertising costs per campaign | Number of campaigns | Overhead costs allocated to each campaign |
| Small | | | 0 |
| Large | | | 0 |
| Total | | | 0 |
| b. Overheads cost pools and drivers under ABC |
| Cost pool | Budget costs | Share of rental etc. | Total cost pool | Cost driver | Cost per driver -£ |
| Creative | | | 0 | | ERROR:#DIV/0! |
| Production | | | 0 | | ERROR:#DIV/0! |
| Admin & support | | | 0 | | ERROR:#DIV/0! |
| Total costs | | | 0 |
| c. i. ABC allocation of creative costs over creative ‘bids’ |
| Campaign mix | No. bids | ABC costs per bid | Total costs |
| Small | | | - 0 |
| Large | | | - 0 |
| | - 0 | | - 0 |
| c. ii.ABC allocation of production costs over production ‘wins’ |
| Campaign mix | No. campaigns | ABC costs per campaign | Total costs |
| Small | | | - 0 |
| Large | | | - 0 |
| | - 0 | | - 0 |
| c. iii ABC allocation of admin & support costs over number of customers |
| Campaign mix | No. customers | ABC costs per customer | Total costs |
| Small | | | - 0 |
| Large | | | - 0 |
| | - 0 | | - 0 |
| c. iv ABC costing of campaign mix |
| Campaign mix | Creative costs | Production costs | Admin & support costs | Total costs | Number of campaigns | Cost per campaign -£ |
| Small | 0 | 0 | 0 | 0 | 0 | ERROR:#DIV/0! |
| Large | 0 | 0 | 0 | 0 | 0 | ERROR:#DIV/0! |
| | 0 | 0 | 0 | 0 | 0 |
| d. Current allocation of costs over small/large ‘won’ campaigns |
| Campaign mix | Direct advertising costs per campaign | ABC costs per campaign | Overhead allocation as a % of direct advertising costs |
| Small | 0 | ERROR:#DIV/0! | ERROR:#DIV/0! |
| Large | 0 | ERROR:#DIV/0! | ERROR:#DIV/0! |
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M4A2Discussiontemplateforcase.xlsx
