Shady Business Pty Ltd manufactures two ranges of products: plastic sunglasses and titanium sunglasses. The company pools costs into three activities (costs pools). In July 2019, the company produced 5,000 plastic sunglasses and 1,000 titanium sunglasses. The indirect cost and the driver details for each of the pools for the month along with other information is provided below:

Under the TRADITIONAL costing method, using Direct Labour Hours as the cost driver, the indirect costs would be applied at the rate of

Select one:

a. $110 per direct labour hour

b. Insufficient information has been provided; and the indirect cost rate cannot be determined.

c. $163.90 per direct labour hour

d. $224 per direct labour hour

Under the Activity Based Costing (ABC) method, the indirect cost rate for each of the activities; Design, Moulding and Quality Control respectively is:

Select one:

a. $60, $4.44 & $45

b. $36, $3.70 & $30

c. $336, $67.20 & $224

d. $224, $13.44 & $112

Notes

Estimated numbers of Cost Driver Estimated indirect costs Plastic Titanium sunglasses sunglasses Activity Total Design Cost driver Number of design changes Number of units produced $18,000 300 200 500 $22,200 5,000 1,000 6,000 Moulding Quality Control Number of tests $27,000 600 300 900 Plastic Titanium Sunglasses Sunglasses 300 110 Direct labour hours