Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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:

Activity Cost Pool Activity Measure Total Cost Total Activity
Customer deliveries Number of deliveries $ 337,500 4,500 deliveries
Manual order processing Number of manual orders 245,000 3,500 orders
Electronic order processing Number of electronic orders 186,000 12,000 orders
Line item picking Number of line items picked 525,000 350,000 line items
Total selling and administrative expenses $ 1,293,500

Med Max gathered the data below for two of the many hospitals that it servesCity General and County General:

Activity Measure Activity
City General County General
Number of deliveries 10 20
Number of manual orders 0 40
Number of electronic orders 10 0
Number of line items 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.

1.

Activity Cost Pool Activity Rate
Manual Order Processing Per Manuel Order
Electronic Ordering Processing Per Electronic Order
Custom Deliveries Per Delivery
Line Item Picking Per Line Item Picked

2.

Activity Cost Pool

City General

ABC COST

County General

ABC COST

Custom Deliveries
Manuel Order Processing
Electronic Order processing
Line Item Picking
Total Activity Cost

If I am missing Data, tell me what part of data i'm missing, this is what I have on all the data and the question

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting

Authors: Debra C. Jeter, Paul Chaney

5th Edition

978-1118098615

Students also viewed these Accounting questions