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Pharmax Distributors specializes in the distribution of pharmaceutical products at the retail level. Pharmax's customer base is comprised of three main retail groups: general supermarket
Pharmax Distributors specializes in the distribution of pharmaceutical products at the retail level. Pharmax's customer base is comprised of three main retail groups: general supermarket chains, large drugstore chains, and small, single-store "Ma & Pa" pharmacies. To evaluate the relative profitability of each customer group, Pharmax plans to use an allocation system that recognizes the relative demands that these groups place on the company's resources. Parmax's chief accountant examined the firm's support costs and activities and collected the following data for a typical operating period Support Activity Order processing Line item processing Store deliveries Carton handling Budgeted Cost $78,000 $62,000 $76,000 $72,000 Total Cost Driver 1,810 customer orders 19,270 line items 1,400 deliveries 70,000 cartons shipped She also gathered the following data for a typical operating period Customer orders Line items Deliveries Cartons shipped General Supermarket 150 1,950 100 31,000 Drugstore Chains 360 4,320 300 24,000 Ma & Pa 1,300 13,000 1,000 15,000 REQUIRED [ROUND ALL ALLOCATION RATES TO THE NEAREST CENT AND ALLOCATIONS TO THE NEAREST DOLLAR.J Part A (5 tries; 5 points) If Pharmax uses a single-driver system to allocate its support costs, with number of customer orders as the single driver, how much would be allocated to its Ma & Pa customers? Submit Answer Tries 0/5 Part B (5 tries; 5 points) Subrmit Answer Tries 0/5 If Pharmax uses an activity-based costing system to allocate its overhead costs, how much would be allocated to its Drugstore Chain customers
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