You have been asked to analyze your sister's preschool operation to determine in what ways she can improve quality and reduce costs. You decide to analyze the activities provided by the preschool and use an ABC system to assign costs to activities. The following list contains potential activities from which to choose. - Learning Activities: At times during the day children are listening to stories, learning to sing simple songs, following simple directions as part of games or art activities, and playing interactively with special toys developed to enhance eye-hand coordination or understanding of spatial relations. - Resting: The children rest on mats during this activity while one teacher monitors and their other teachers prepare lesson plans. - Snack and Meal Activities: Snacks and meals are prepared by teachers and one food service employee. Sometimes the students prepare their own snacks and practice following directions. - Free Play Activities: While children play either inside or outside, a few teachers monitor their progress while others prepare learning activities to be used later - Art and Craft Activities: These daily activities promote some of the same skills as the learning activities, but children are encouraged to be more creative - Miscellaneous: These activities include greeting the children, helping them with their coats, helping them use the restroom, interacting with parents, and conferencing with parents - Conferencing with Parents: This quarterly activity consists of the head teacher (your sister) meeting with each child's parents for half an hour.
Required:
a.) Choose several activities to use for cost pools. Explain your choices.
b.) Choose cost drivers for these pools. Explain your choices.
c.) Identify possible reasons why measurement error might exist in the ABC costs.