Assume that Gary Knitting Associates buy a new forklift for $40,000.00. It is expected that the forklift will last for five (5) years and then spontaneously combust (at night, when nobody gets hurt) and have no residual value at the end of the five years. During its life, the forklift will provide annual savings in handling costs of $15,000.00. The forklift is exclusively used in the shipping department to load finished orders onto trucks. It can transport one case at a time, independent of the case size or order size. What would be the appropriate cost driver for the activity forklifting?

Select one:

a. Yardage.

b. Direct labor cost in the shipping department.

c. Direct labor hours in the shipping department.

d. Direct labor cost in the knitting department.

e. Number of cases.