The CFO of ABC Municipality has heard of activity based costing and wants to execute it in the municipality. Because ABC involves a number of changes to how service costs are determined, he has decided to executeit only in the Refuse Department at first. He has asked you to help him with this main task. The following income and expenditure information was given:
Consumers are charged differently according to the services they need:
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Per consumer
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Income
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per month
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Availability charge (Per consumer type)
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Flat rate
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R 20
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1st consumption per unit (Container
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Normal bin
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R 10
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type or size)
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Large container
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R 150
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2nd consumption per unit (Frequency
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Daily
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R 50
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of collection)
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Weekly
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R 20
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