Cost Objects: The cost objects identified by our group for Super Daycare are; - Full-Time Childcare Program - Part-Time Childcare Program These programs were chosen because they are the products that Super Daycare are selling to parents. In management accounting, cost objects are an important function that can help management measure costs separately. Each cost object is an item which is assigned a separate measure of cost activity. Direct costs are costs that can be identified and traced directly to these cost objects. Indirect costs are costs that cannot be traced directly (such as depreciation, electricity, rates and building), would also be allocated to the cost objects. Activities: Activities are units of work performed within the daycare organization. The activities identified for Super Daycare are;

Activities	Cost Drivers
Salaries and Wages:
- Meals and Snack Related Activities 20%	Number of Meals
- Supervision of Naps or Recreation 20%	Labour Hours
- Greeting or Sending Home 10%	Number of Children
Salaries and Wages:
- Meals and Snack Related Activities 20%	Number of Meals
- Supervision of Naps or Recreation 20%	Labour Hours
- Greeting or Sending Home 10%	Number of Children
- Presenting Educational Experiences 50%	Labour Hours
Meals and Snacks	Number of Meals
Supplies Full-Time Program	Number of Children
Supplies Part-Time Program	Number of Children

There are two categories of activity measures; transaction drivers which involves counting how many times an activity occurs, and duration drivers which measure how long an activity takes to complete.

Activity Based Costing (ABC) model includes costing view and activity management view. The costing view considers how to use ABC to estimate the costs of the cost objects and improve the allocation of the overheads to products. The activity management view helps managers identify and analyse business activities.

Cost Drivers:

Cost drivers are activities or factors that cause costs to be incurred. Cost drivers consider what the direct cause of a cost is. They can be identified in three different ways; resource drivers, activity drivers and root cause cost drivers.

The cost drivers for Super Daycare were determined as follows;

Salaries and Wages - Labour

Meals and Snacks Related Activities The cost driver is the number of meals, because this directly relates to the number of meals and/or snacks a child in each Program receives. The more children in each Program, the more meals and/or snacks required; if there are less children in each Program, less meals/snacks are required for the activity.

Supervision of Naps or Recreation The cost driver identified is the total number hours, each time a child is added or leaves the cost per hour per child increases or decreases.

Greeting or Sending Home The cost driver is the number of children, each child in either Program receives a daily greeting and a daily sending home.

Presenting Education Experiences The cost driver is the total number of hours, each time a child is added or leaves the cost per hour per child increases or decreases.

Materials:

Meals and Snacks The cost driver identified is the number of meals because this directly relates to the number of meals and/or snacks a child in each Program receives. The more children in each Program, the more meals and/or snacks required; if there are less children in each Program, less meals/snacks are required for the activity.

Supplies Full-Time Program The cost driver is the number of children in the full-time Program, each time a child is added or leaves the Program the cost of supplies increases or decreases.

Supplies Part-Time Program The cost driver is the number of children in the part-time Program, each time a child leaves or starts the Program the cost of supplies decreases or increases.

Using the Activities and Cost Drivers identified above will assist the management accountant in allocating costs to each of the Cost Objects to estimate the annual cost per child in each program. This will give the director of Super Daycare costing information for making decisions on expanding either of the two services.

Required:

Using the activities your group identified in Part A, estimate the annual cost per child in each program. Assume that Super Daycare opens Monday to Friday for 50 weeks a year, excluding public holidays. Show all your workings.