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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) Total Cost Total Activity

Assume a service company has implemented an activity-based costing system with five activities as shown below:

Activity Cost Pool (Activity Measure) Total Cost Total Activity
Customer deliveries (Number of deliveries) $ 400,000 8,000 deliveries
Manual order processing (Number of manual orders) $ 280,000 5,000 manual orders
Electronic order processing (Number of electronic orders) $ 150,000 15,000 electronic orders
Line item picking (Number of line items picked) $ 450,000 375,000 line items
Other organization-sustaining costs (None) $ 300,000

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
Activity Measure Hospital A Hospital B
Number of deliveries 12 25
Number of manual orders 0 30
Number of electronic orders 15 0
Number of line items picked 120 250

How much total activity cost should be assigned to Hospital A for internal management purposes?

a.1,052

b. 992

c. 942

d. 894

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