Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these...
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Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total selling and administrative expenses Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Required 1 Activity Required 2 City General 10 0 10 120 Customer deliveries Manual order processing Electronic order processing Line item picking Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked County General 20 40 Required: 1. Compute the activity rate for each activity cost pool. 2. Compute the total activity costs that would be assigned to City General and County General. Complete this question by entering your answers in the tabs below. 0 280 Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool < Required 1 Activity Rate per delivery per manual order per electronic order per line item picked Total Cost $ 374,400 277,400 194,340 513,000 $ 1,359,140 Required 2 > Total Activity 4,800 deliveries 3,800 orders 12,300 orders 380,000 line items. Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total selling and administrative expenses Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Required 1 Activity Required 2 City General 10 0 10 120 Customer deliveries Manual order processing Electronic order processing Line item picking Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked County General 20 40 Required: 1. Compute the activity rate for each activity cost pool. 2. Compute the total activity costs that would be assigned to City General and County General. Complete this question by entering your answers in the tabs below. 0 280 Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool < Required 1 Activity Rate per delivery per manual order per electronic order per line item picked Total Cost $ 374,400 277,400 194,340 513,000 $ 1,359,140 Required 2 > Total Activity 4,800 deliveries 3,800 orders 12,300 orders 380,000 line items.
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Related Book For
Managerial Accounting
ISBN: 978-0078111006
14th edition
Authors: Ray Garrison, Eric Noreen and Peter Brewer
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