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Accccounting help! h3 q 4 Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of
Accccounting help! h3 q 4
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 Activity MeasureTotal Cost S 439,900 Total Activity 5,300 deliveries Number of deliveries Number of manual orders Number of electronic orders Number of line items picked 335,400 4,300 orders 208,640 12,800 orders 602,000 430,000 line items Electronic order processing Line item picking Total selling and administrative 1.585,940 Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity Activity Measure General 10 20 Number of deliveriesaCounty 40 orders Number of electronic 10 orders Number of line items 130 290 pickedStep by Step Solution
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