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Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals, Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 6%. For example, if a hospital buys supplies from Worley that cost Worley $100 to buy from manufacturers, Worley would charge the hospital $106 to purchase these supplies. For years, Worley believed that the 6% markup covered its selling and administrative expenses and provided a reasonable profit However, in the face of declining profits, Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown: Activity Cost Pool (Activity Measure) Total Cost Total Activity Customer deliveries (ber of deliveries) $ 320,000 4,000 deliveries Manual order processing Number of manual orders > 438,000 6,000 orders Electronic order processing Number of electronic orders) 253,000 11,000 orders Line Iten picking (Number of line itens picked) 833,000 490,000 line items Other organization-sustaining costa (one) 600,000 Total selling and administrative expenses $2,444,000 Worley gathered the data below for two of the many hospitals that it serves-University and Memorial (each hospital purchased medical supplies that had cost Worley $34,000 to buy from manufacturers) Activity Measure Tamber of deliveries Number of manual orders Number of electronic orders Number of line itens picked Activity University Memorial 12 26 0 48 17 0 160 240