Homework: Chapter 4 Homework SE Score: 0.09 of 1 pt 4 of 7 (4 complete) HW Score: 37.99%, 2.66 of 7 %E4-23A (similar to) Question Help Worchester Pharmacy, part of a large chain of pharmacies, fills a variety of The controller has gathered the following information: prescriptions for customers. The complexity of prescriptions filled by Worchester (Click the icon to view the expected usage and costs.) varies widely, pharmacists can spend between five minutes and six hours on a prescription order. Traditionally, the pharmacy has allocated its overhead based on The clerk for Worchester has gathered the following information regarding two the number of prescriptions. The pharmacy chain's controller is exploring whether recent pharmacy orders: activity-based costing (ABC) may better allocate the pharmacy overhead costs to Click the icon to view the pharmacy order data.) pharmacy orders. Read the requirements Requirement 1. What is the traditional overhead rate based on the number of prescriptions? First identify the formula used to compute the traditional overhead rate, then compute the rate. (Round your answer to the nearest cent. Abbreviations used: est. - estimated) Est, total pharmacy overhead Est. number of prescriptions Traditional overhead rate Requirements art of a large rs. The com s can spend onally, the pl ns. The pha BC) may be mation: X and costs.) Jowing informa Ir data.) 1. 2. the tradition 3. used to com bent. Abbreviati 4. cy overhead What is the traditional overhead rate based on the number of prescriptions? How much pharmacy overhead would be allocated to customer order number 1242 if traditional overhead allocation based on the number of prescriptions is used? How much pharmacy overhead would be allocated to customer order number 1243 if traditional overhead allocation based on the number of prescriptions is used? What are the following cost pool allocation rates: a. Pharmacy occupancy costs b. Packaging supplies c. Professional training and insurance costs How much would be allocated to customer order number 1242 if activity-based costing (ABC) is used to allocate the pharmacy overhead costs? How much would be allocated to customer order number 1243 if activity-based costing (ABC) is used to allocate the pharmacy overhead costs? Which allocation method (traditional or activity-based costing) would produce a more accurate product cost? Explain your answer. 5. 6. 7. Print Done the edit fields i Data Table de nt th Total Annual Total Annual Estimated Cost Driver Activity 85,000 d: est. = Cost Pools Estimated Cost Cost Driver tota $ 20,000 Pharmacy occupancy costs (utilities, rent, and other costs). Packaging supplies (bottles, bags, and other packaging). Professional training and insurance costs Total pharmacy overhead. Technician hours 68,000 Number of prescriptions 20,000 50,000 Pharmacist hours. 138,000 $ $ 25,000 $ Print Done ey chain's controller is exploring whether allocate the pharmacy overhead costs to recent pharmacy orders: E: (Click the icon to view the pharmacy Read the requirements Data Table Customer Order Technician Number of Pharmacist Number Hours Prescriptions Hours 1242 0.5 3 3.0 1243 0.5 1 2.5 Print Done
