Quick Supply distributes office supplies to small to medium sized offices throughout the Region of Waterloo, Ontario. Quick Supply sets its prices by marking up its cost of goods sold by 5%. For example, if Quick Supply paid $100 to buy supplies from manufacturers. Quick Supply would charge its customers $105 to purchase these supplies. For years, Quick Supply believed that the 5% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits, Quick Supply decided to implement an ABC system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities, as shown below. Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line Item picking other organization-sustaining costs Total selling and administrative expense Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line itaas picked NA Total Cost Total Activity $ 400,000 5,000 deliveries 380,000 4,000 arders 280,00 12,500 orders 500,000 400,000 line itens 680,000 $2,080, eee Quick Supply gathered the data below for two typical offices that it serves-City Office and County Office (both offices purchased a total quantity of office supplies that had cost Quick Supply $30,000 to buy from manufacturers) Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line itens picked Activity City Office County Office 22 15 8 B 100 Required: PLO 1 of 1 Next O at E Required: 1. Compute the total revenue that Quick Supply would receive from City Office and County Office. City Office County Office 480 $ 635 Total revenue received 2. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool Customer deliveries $ $ Manual order processing Electronic order processing Line item picking Activity rate 80.00 per delivery 75.00 per manual order 16 00 per electronic order 1 25 per line item picked S s 3. Compute the total activity costs that would be assigned to City Office and County Office, City Office Conntu.General Fs 1 of 1 3. Compute the total activity costs that would be assigned to City Office and County Office. City Office County General Total activity costs $ 868 $ 2.210 4. Compute Quick Supply's customer margin for City Office and County Office (Hint: Do not overlook the $30,000 cost of goods sold that Quick Supply incurred serving each office.) City Office $ (20,788) County Office (18.875) Customer margin (loss) 5. Not available in Connect Prey 1 of 1 !!! Nex E
