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Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed below:
Activity Cost Pool Activity Measure Activity Rate Order size
Number of direct labor-hours $ 16.50 per direct labor-hour
Customer orders Number of customer orders $ 361.00 per customer order
Product testing Number of testing hours $ 81.00 per testing hour
Selling Number of sales calls $ 1,486.00 per sales call
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