Prahran Daycare (PD) offers childcare services to the local community. For many years it simply offered services for preschoolers. In this environment, managing the costs and services seemed relatively straightforward. In recent years, government subsidies and building programs have enabled PD to offer expanded services. For example, two years ago PD added an after-school care program for older children. It is also planning school holiday programs and a special tours activity. Until now, the cost system has been relatively simple, with little regard for accumulating costs for the individual services offered. However, the new manager of PD, Noah Day, knows he needs better cost data, both for reliable costing of services and to help him manage the growing costs of PD. 

Required

(a) Advise Noah how activity analysis might help with improved cost data.

(b) Advise Noah how he could use activity analysis to help manage the activities.