2. Zerox Limited ("the Company") sells and services three sizes of photocopying machines. Its service department provides after sales service to its customers. The after sales service includes planned maintenance of the machines and repairs in the event of a machine breakdown. Service department customers are charged an amount per copy that differs depending on the size of the machine. The Company's existing costing system uses a single overhead rate for all machines based on total overheads divided by total sales revenue from copy charges to charge the cost of the service department's support activities to each size of machine. The Service Manager has suggested that the copy charge should more accurately reflect the costs involved. The Company's accountant has decided to implement an activity-based costing system and has obtained the following information about the support activities of the service department: Activity Cost driver Overheads per annum '000 Customer account handling Planned maintenance scheduling Unplanned maintenance Number of customers 378 Number of planned 1,440 maintenance visits Number of unplanned 441 scheduling maintenance visits Spare part procurement Number of purchase orders 729 Other overheads Number of machines 1,800 Total overheads 4,788