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Assume a service company has implemented an activity-based costing system with five activities as shown below: Activity Cost Pool (Activity Measure) Customer deliveries (Number of
Assume a service company has implemented an activity-based costing system with five activities as shown below: 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) Total Cost $ 400,000 $ 280,000 $ 150,000 $ 450,000 $ 300,000 Total Activity 8,000 deliveries 5,000 manual orders 15,000 electronic orders 375,000 line items The company serves numerous customers, two of which include Hospital A and Hospital B. The activity demands pertaining to these two customers are as follows: Activity Measure Number of deliveries Number of manual orders: Number of electronic orders Number of line items picked Activity Hospital A Hospital Bi 11 25 0 30 15 0 120 250 How much total activity cost should be assigned to Hospital A for internal management purposes? (Do not round your intermediate calculations.)
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