1. Compute the total revenue that Worley would receive from University and Memorial.

2. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.)

3. Compute the total activity costs that would be assigned to University and Memorial. (Round your intermediate calculations and final answers to 2 decimal places.)

4. Compute Worleys customer margin for University and Memorial. (Hint: Do not overlook the $38,000 cost of goods sold that Worley incurred serving each hospital.) (Loss amount should be indicated with a minus sign. Round your intermediate calculations and final answers to 2 decimal places.)

Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 8%. For example if a hospital buys supplies from Worley that had cost Worley $100 to buy from manufacturers. Worley would charge the hospital $108 to purchase these supplies For years, Worley believed that the 8% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown below Total Activity 3,000 deliverie:s Activity Cost Pool (Activity Measure) Customer deliveries (Number of deliveries) Manual order processing (Number of manual orders) Electronic order processing (Number of electronic orders) Line item picking (Number of line items picked) Other organization-sustaining costs (None) Tolal selling and administrative expenses Total Cost $249,000 518,000 253,000 967,500 650,000 $ 2,637,500 7,000 orders 11,000 orders 450,000 line items Worley gathered the data below for two of the many hospitals that it serves-University and Memorial (both hospitals purchased a total quantity of medical supplies that had cost Worley S38,000 to buy from its manufacturers): Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked University 12 Memorial 30 49 16 170 230 Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 8%. For example if a hospital buys supplies from Worley that had cost Worley $100 to buy from manufacturers. Worley would charge the hospital $108 to purchase these supplies For years, Worley believed that the 8% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown below Total Activity 3,000 deliverie:s Activity Cost Pool (Activity Measure) Customer deliveries (Number of deliveries) Manual order processing (Number of manual orders) Electronic order processing (Number of electronic orders) Line item picking (Number of line items picked) Other organization-sustaining costs (None) Tolal selling and administrative expenses Total Cost $249,000 518,000 253,000 967,500 650,000 $ 2,637,500 7,000 orders 11,000 orders 450,000 line items Worley gathered the data below for two of the many hospitals that it serves-University and Memorial (both hospitals purchased a total quantity of medical supplies that had cost Worley S38,000 to buy from its manufacturers): Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked University 12 Memorial 30 49 16 170 230