5 Exercise 7-10 (Algo) Customer Profitability Analysis (L07-3, LO7-4, LO7-5] 5 DO Book Hint 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 7%. For example, if a hospital buys supplies from Worley that cost Worley $100 to buy from manufacturers Worley would charge the hospital S107 to purchase these supplies For years, Worley believed that the 7% markup covered its selling and administrative experses 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 Activity Cost Pool Activity Measure Total cost Customer deliveries (Number of deliveries) Total Activity Manual order processing (hunber of manual orders $561,000 7.600 deliveries 560.000 Electronic order processing (lunber of electronic orders 8,000 orders 252.000 12,000 orders Line Item picking (umber of line items picked) 650,000 500,000 Tine Items other organisation containing costs (none) 600.000 Total selling and administrative expenses $ 2,731,000 Worley gathered the data below for two of the many hospitals that it serves-University and Memorial teach hospital purchased medical supplies that had cost Worley $37000 to buy from manufacturers) Activity Activity Measure University Boris Number of deliveries 15 24 Number of manual orders 50 Number of electronic orders 15 Number of line itens picked 130 250 Point Reference Required: 1 Compute the total revenue that Worley would receive from University and Memorial 2. Compute the activity rate for each activity cost pool 3. Compute the total activity costs that would be assigned to University and Memorial 4. Compute Worley's customer margin for University and Memoriat (Hint Do not overlook the $37.000 cost of goods sold that Worley incurred serving each hospital) Complete this question by entering your answers in the tabs below. Required Required 2 Required 4 Required Activity Cost Pool Activity Measure) Customer deliveries (Mumber of deliveries Manual order processing (umber of manual orders) Electronic order processing (umber of electronic orders) Line Iten picking (Number of line itens picked) Other organization sustaining costs (none) Total selling and administrative expenses Total cost 5581,000 560,000 252,000 650,000 600.000 $ 2,731,000 Total Activity 7,000 deliveries 8.000 orders 12,000 orders 500,000 line itens 5 points eBook Hint 24 0 Worley gathered the data below for two of the many hospitals that it serves-- University and Memorial (each hospital purchased medical supplies that had cost Worley $37.000 to buy from manufacturers): Activity Activity Measure University Memorial Number of deliveries 19 Number of manual orders 50 Number of electronic orders 15 Number of line itens picked Required: 1. Compute the total revenue that Worley would receive from University and Memorial 2. Compute the activity rate for each activity cost pool 3. Compute the total activity costs that would be assigned to University and Memorial 4. Compute Worley's customer margin for University and Memorial (Hint Do not overlook the $37.000 cost of goods sold that Worley incurred serving each hospital) 130 250 Print References Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the total revenue that Worley would receive from University and Memorial, Total Revenue University Memorial Required 2 > umber of deliveries) Manual order processing Number of manual orders) Electronic order processing (umber of electronic orders) Line Item picking (umber of line tes picked) Other organization sustaining costs (none) Total selling and administrative expenses TOTAL 7.000 deliver 9.000 orders 12,000 orders 500,000 lind itens 5 511,000 360,000 252,000 610,000 60,000 $ 2,731,000 5 points Worley gathered the data below for two of the many hospitals that it serves-University and Memorial teach Hospital purchased medical supplies that had cost Worley $37000 to buy from manufacturers eBook Hint Activity Hensure Number of deliveries Number of manual orders Number of electronic orders Number of line itens picked Activity University Memorial 19 24 50 15 130 280 Print References Required: 1. Compute the total revenue that Worley would receive from University and Memorial 2. Compute the activity rate for each activity cost pool 3. Compute the total activity costs that would be assigned to University and Memorial 4. Compute Worley's customer margin for University and Memorial Hint Do not overlook the $37,000 cost of goods sold that Worley incurred serving each hospital) Complete this question by entering your answers in the tabs below. Required 1 Readed Required 3 Required 4 Compute the activity rate for each activity cost poolRound your answers to 2 decimal places.) Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line Item picking Activity Rate per delivery per manual order per electronic order per line iteni picked y cost Pool (Activity Measure) Total Cost Customer deliveries (Number of deliveries) Total Activity Manual order processing (umber of manual orders) 5 581,000 7,000 deliveries Electronic order processing Number of electronic orders) 568,000 3,000 orders 252,000 12.000 orders Line item picking (umber of line itens picked) 650,000 500,000 line items other organization sustaining costs (none) 600.000 Total selling and administrative expenses 12,731,000 Worley gathered the data below for two of the many hospitals that it serves-University and Memorial (each hospital purchased medical supplies that had cost Worley 937000 to buy from manufacturers GO Hint Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line itens picked activity University Menorint 19 24 0 50 15 10 200 Print Required: 1 Compute the total revenue that Worley would receive from University and Memorial 2. Compute the activity rate for each activity cost pool 3. Compute the total activity costs that would be assigned to University and Memorial 4. Compute Worley's customer margin for University and Memorial (Hint Do not overlook the $37000 cost of goods sold that Worley incurred serving each hospital) rences Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required a Required) Compute Worlay's customer margin for University and Memorial. (Hint: Do not overlook the $37,000 cost of goods sold that Worley incurred serving each hospital.) (Loss amounts should be indicated with a minus sign. Round your intermediate calculations to 2 decimal places. Round your final answers to the nearest whole number) Customer Margin University Memorial