2. Activity Rates: Estimated overhead Activity Cost Pool cost (b) Expected Activity (a) + (b) Activity Rate Customer deliveries $ 261, 608 3,000 deliveries $87.00 per delivery Manual order processing $ 376,060 5,000 orders $74.00 per manual order Electronic order processing 3 242,908 11,080 orders $22.00 per electronic order Line item picking $1, 127, 890 498, eee line items $ 2.30 per line item picked 3. Activity costs are assigned to the two hospitals as follows: University: (a ) (b) (a) x (b) Activity Cost Pool Activity Rate Activity ABC Cost Customer deliveries $87.00 per delivery 13 deliveries $1, 131.80 Manual order processing $74.00 per order e orders Electronic order processing $22.00 per order 11 orders 242.90 Line item picking $ 2.30 per line item 150 line items 345.00 Total activity costs $1, 718.00 Memorial: (a) (b ) (a) x (b) Activity Cost Pool Activity Rate Activity ABC Cost Customer deliveries $87.00 per delivery 24 deliveries $2, 088.00 Manual order processing $74.00 per order 49 orders 3, 626.00 Electronic order processing $22.00 per order 0 orders Line item picking $ 2.30 per line item 200 line items 460.08 Total activity costs $6, 174.06 4. Customer margins for the two hospitals: University Memorial Sales $40, 330.00 $ 40, 330.00 Cost of goods sold 37,090.09 37, 090.00 Gross margin 3,330.00 3,330.00 Customer deliveries 1, 131.00 2, 088.00 Manual order processing 3,626.00 Electronic order processing 242.00 Line item picking 345.00 460.80 Total activity costs 1, 718.00 6,174.00 Customer margin $ 1, 612.00 $ (2,844.08)