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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 Measure Activity Cost Pool Total Cost Customer deliveries Manual order processing Electronic order processing Line item picking Number of deliveries Number of manual orders Number of electronic orders Number of line items picked $ 439,900 Total Activity 5,300 deliveries 335,400 4,300 orders 208,640 12,800 orders 602,000 430,000 line items Total selling and administrative expenses $ 1,585,940 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 20 0 40 Number of electronic orders 10 0 Number of line items picked 130 290 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 1 Required 2 Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool Customer deliveries Activity Rate per delivery Manual order processing per manual order Electronic order processing per electronic order Line item picking per line item picked
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