Wilmington Pharmacy, part of a large chain of pharmacies, fills a variety of prescriptions for

customers. The complexity of prescriptions filled by Wilmington varies widely; pharmacists can

spend between five minutes and six hours on a prescription order. Traditionally, the pharmacy has

allocated its overhead based on the number of prescriptions in each order. For example, a customer

may bring in three prescriptions to be filled on the same day; the pharmacy considers this to be

one order. The pharmacy chain's controller is exploring whether activity$-$based costing $($ABC$)$ may

better allocate the pharmacy overhead costs to pharmacy orders. The controller has gathered the

following information:

The clerk for Wilmington has gathered the following information regarding two recent pharmacy

orders:

Requirements

What is the traditional overhead rate based on the number of prescriptions?

How much pharmacy overhead would be allocated to customer order number $1247$ if

traditional overhead allocation based on the number of prescriptions is used?