Big Mike operates Daddys Nursery which provides baby-sitting services for children between 2 to 5 years old. Working mothers leave their children at 8:00 am and pick them up after office hours. Big Mike converted his house into a nursery home where children are provided with sleeping areas, play pen and study areas, as well as meals, milk, and snacks for the entire day. Nursery fee is computed by adding a mark up to the total cost of service provided to each child. At present, Big Mike uses the traditional costing system in computing the cost of service per child, where the total cost is divided by the number of children served. During the previous month, the nursery served 100 children, for which the company incurred $50,000 total cost of service. Big Mike observed, however, that it is not right to just divide the total cost by the number of children because incurrence of some costs may vary depending on some factors. For example, children between 2 to 3 years old need more attention and are provided more services that those above 3 years old in a scenario.

Considering this, Big Mike, plans to apply ABC system in determining the cost of service per child. He conducted a study of the previous months operations, and the following results came out as follows:

Cost Category	Cost	Cost Driver	Cost Driver Quantity
Meals, Snacks, Supplies	$20,000	Number of children	100 children
Caregiving hours	$30,000	Staff hours	1,200 staff

Children Category	Number of children	Staff hours
Babies (2-3 years old)	60	1,000
Kiddies (above 3 years old)	40	200

Question/s:

1. If the traditional costing system were used and nursery fee was computed at 300% of the cost of service per child, Daddys Nursery could have charged each child a fee of?

2. If the ABC system were used, nursery fee per child should have been?