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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 of
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:
Chapter 4: Homework Saved 4 3.57 points 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 Activity Measure Total Cost Total Activity Customer deliveries Sunber of deliveries $ 374,400 4,800 deliveries Manual order processing Number of manual order: 277,400 3,800 orders Electronic order processing Number of electronic orders 194,340 12,300 orders Line item picking Number of line itens picked 513,000 380,000 line items Total selling and administrative expenses $1,359,140 eBook Med Max gathered the data below for two of the many hospitals that it serves-City General and County General Ask Activity City County General General 10 20 0 40 10 0 120 280 Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Print References 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 Customer deliveries per delivery Manual order processing per manual order Electronic order processing per electronic order Line item picking per line item pickedStep by Step Solution
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