After attending the new training on Activity Based Costing, the manager of Great Little Ones Pty Ltd wants to adapt ABC costing method. Their accountant advised them they could allocate overheads to the following activities and use cost drivers as below:

			Cost Drivers
ABC Costing	Cost ($)	Cost drivers	< 2 years old	2-> 3 years old	3-5 years old	Total
Cooking	$50,000	The number of meals	235	470	470	1175
Administration	$100,000	The number of tasks	450	500	300	1250
Occupancy	$350,000	The number of square meters used	30	40	40	110
Total indirect cost	$500,000

a) Under the Activity Based Costing (ABC) method, calculate indirect cost rate for Cooking only, you can use the table below to fill in your answer

Activity	$	Cost Driver	Indirect cost rate (workings)
Cooking

b) Under the Activity Based Costing (ABC) method, the indirect cost rate for Occupancy have been given to you, calculate the allocation of indirect cost for these two activities for the 3-5 years old only, you can use the table below

Activity	Indirect Cost Rate	3-5 years old OH allocation(workings)
Administration	$80 per task
Occupancy	$3,181.82 per square meter used