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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: Total Activity 4,100 deliveries 3,100 orders 11,600 orders 310,000 line items Activity Cost Pool Customer deliveries Activity Measure Number of deliveries Number of manual orders Number of electronic orders Total Cost $ 291,100 204,600 175,160 325,500 Manual order processing Electronic order processing Line item picking Number of line items picked $996,360 Total selling and administrative expenses Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity City General County General Activity Measure Number of deliveries 15 30 Number of manual orders 0 60 Number of electronic orders Number of line items picked 20 C 140 300 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 total activity costs that would be assigned to City General and County General. (Do not round intermediate calculations.) Cost County General City General Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total activity costs
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