Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Help with part B please! Pharmax Distributors specializes in the distribution of pharmaceutical products at the retail level. Pharmax's customer base is comprised of three

image text in transcribedHelp with part B please!

Pharmax Distributors specializes in the distribution of pharmaceutical products at the retail level. Pharmax's customer base is comprised of three main retail groups: general supermarket chains, large drugstore chains, and small, single-store "Ma & Pa" pharmacies. To evaluate the relative profitability of each customer group, Pharmax plans to use an allocation system that recognizes the relative demands that these groups place on the company's resources. Parmax's chief accountant examined the firm's support costs and activities and collected the following data for a typical operating period: Support Activity Order processing Line item processing Store deliveries Carton handling Budgeted Cost $74,000 $64,000 $67,000 $73,000 Total Cost Driver 1,830 customer orders 18,970 line items 1,400 deliveries 73,000 cartons shipped She also gathered the following data for a typical operating period Customer orders Line items Deliveries Cartons shipped General Supermarket 140 1,680 100 30,000 Drugstore Chains 390 4,290 300 27,000 Ma & Pa 1,300 13,000 1,000 16,000 REQUIRED [ROUND ALL ALLOCATION RATES TO THE NEAREST CENT AND ALLOCATIONS TO THE NEAREST DOLLAR.) Part A (5 tries; 5 points) If Pharmax uses a single-driver system to allocate its support costs, with number of deliveries as the single driver, how much would be allocated to its Ma & Pa customers? $198,570 You are correct. Your receipt no. is 152-5995 Part B (5 tries; 5 points) If Pharmax uses an activity-based costing system to allocate its overhead costs, how much would be allocated to its Drugstore Chain customers? 47300.7 Submit Answer Incorrect. Tries 2/5 Previous Tries

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Auditing Real Issues And Cases

Authors: Michael C. Knapp, Loreen Knapp

5th Edition

032418834X, 978-0324188349

More Books

Students also viewed these Accounting questions

Question

What is Levon's relative market share based on units

Answered: 1 week ago

Question

In what ways are you similar to your closest friends?

Answered: 1 week ago