Beanie Kids Holiday Camp: Activity Based Costing

Sister Sarah, the manager of the convent-run Beanie Kids Holiday Camp, is concerned about responsible management of the nonprofit camp. To that end, she works with Sister Rachel, who handles the camp's accounting records, to prepare and track the camp's budget and actual costs. After Sister Ruth, who handles the convent's financial records, attends a seminar on activity-based costing, she suggests the camp use a refined costing system. In this hypothetical case students examine the camp's financial performance to prepare a flexible budget based on the number of children attending the camp, as well as a flexible budget incorporating activity-based costing.