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Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face
Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below. Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total selling and administrative expenses Activity Measure Number of deliveries Number of manual orders Total Activity 4,500 deliveries. Total Cost $337,500 245,000 3,500 orders Number of electronic orders 186,000 12,000 orders Number of line items picked $25,000 350,000 line items $ 1,293,500 nces Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity Number of deliveries Activity Measure Number of manual orders City General County General 10 201 0 40 Number of electronic orders 10 0 Number of line itens picked 150 310 Required: 1. Compute the activity rate for each activity cost pool. 2. Compute the total activity costs that would be assigned to City General and County General Complete this question by entering your answers in the tabs below. Required: h. Compute the activity rate for each activity cost pool. 2. Compute the total activity costs that would be assigned to City General and County General. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the total activity costs that would be assigned to City General and County General. (Do not round intermediate calculations.) City General Activity Cost Pool County General AllC Cost ABC Cost Customer deliveries Manual order processing Electronic order processing Line item picking Total activity costs $ 0 $ 0
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