Question
Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices
Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 7%. For example, if a hospital buys supplies from Worley that had cost Worley $100 to buy from manufacturers, Worley would charge the hospital $107 to purchase these supplies.
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Worley gathered the data below for two of the many hospitals that it servesUniversity and Memorial (both hospitals purchased a total quantity of medical supplies that had cost Worley $33,000 to buy from its manufacturers): |
Activity | ||
Activity Measure | University | Memorial |
Number of deliveries | 13 | 20 |
Number of manual orders | 0 | 44 |
Number of electronic orders | 14 | 0 |
Number of line items picked | 160 | 230 |
Required: | |
1. | Compute the total revenue that Worley would receive from University and Memorial. |
2. | Compute the activity rate for each activity cost pool.(Round your answers to 2 decimal places.) |
3. | Compute the total activity costs that would be assigned to University and Memorial.(Round your intermediate calculations and final answers to 2 decimal places.) |
4. | Compute Worleys customer margin for University and Memorial. (Hint: Do not overlook the $33,000 cost of goods sold that Worley incurred serving each hospital.)(Loss amount should be indicated with a minus sign. Round your intermediate calculations and final answers to 2 decimal places.) |
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