Thomond Ltd. manufactures two products: Ace and Bat. Data for the coming period is shown below:
Ace Bat Number of units 50,000 units 30,000 units
Direct costs per unit 25 15 
Machine hours per unit 4 hours 10 hours
Number of units shipped per delivery 25 units 5 units
The company is implementing Activity Based Costing and the accounts clerk has analyzed the overhead costs as follows:
Machinery (depreciation of machinery, machine power, etc.) 750,000 
Deliveries (depreciation of vehicles, vehicle maintenance, etc.) 600,000 15.
The cost driver rate for deliveries is:
a) 75 per delivery
b) 0.75 per delivery 
c) 20,000 per delivery 
d) none of the above

Answer rating: 100% (QA)

Answer Total delivery cost600000 T... View the full answer