Anil has a transport business. They currently expanded this business by including the provision of rapid transit buses in Toronto GTA of Ontario. Anil's management accountant has provided the following information on monthly revenues and costs in Ontario. The bus division has a monthly revenues of $3, 800 while the taxi division generates revenues of $120,000.

Expenses of $2,669.76 were allocated to divisions based on the number of kilometres travelled. Anil has heard about Activity Based Costing and wants to know what it could provide so he has obtained the following monthly information on expenses for their Ontario province operations:

Anil has identified that the main activity cost areas include salaries, vehicle costs and booking fees.

1. Identify the appropriate cost pools and calculate the appropriate driver rates for the activities listed above.
2. You may wish to use a table in your answer as follows: Cost pool $ Driver Driver Unit Driver rate
3. Case Study 2: Singh Enterprises manufactures microchips for computers. A market survey shows that a 10% reduction in price will result in a 30% increase in sales with variable costs per unit remaining unchanged. On the other hand an investment of $35,000 in machinery would reduce variable costs by $3 a unit. Determine the sales volume and breakeven point for each option given Singh enterprises currently sells 15,000 units @$20 each, has a variable costs of $80,000 and fixed costs of $40,000. Ensure you have checked all your calculations for accuracy before submission.