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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 Activity Measure Total Activity 4,900 deliveries 3,900 orders 12,400 orders 390,000 line items Total Cost Number of deliveries 387,100 288,600 197,160 507,000 Number of manual orders Number of electronic orders Number of line items picked Total selling and administrative expenses $ 1,379,860 Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity City County Activity Measure Number of deliveries General General 20 40 Number of manual orders 80 Number of electronic orders Number of line items picked 20 110 270 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 Activity Rate per delivery per manual order Customer deliveries Manual order processing Electronic order processing Line item picking per electronic order per line item picked < Required 1 Required 2 > Required 1 Required 2 Compute the total activity costs that would be assigned to City General and County General. (Do not round intermediate calculations.) Cost Activity Cost Pool City General County General Customer deliveries Manual order processing Electronic order processing Line item picking Total activity costs < Required 1 Required 2 >
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