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 6%. For example, if a hospital buys supplies from Worley that cost Worley $100 to buy from manufacturers, Worley would charge the hospital $106 to purchase these supplies For years, Worley believed that the 6% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits, Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown: Activity Cont Pool (Activity Mature Total Cont Total activity Customer deliveries (Number of deliveries) $ 340,000 4,000 deliveries Manual order processing Number of manual orders) 456,000 6,000 ordera Electronie order processing Number of electronie ordera) 375,000 15,000 orders Line iton picking (Number of line itons picked) 180,000 440,000 line item other organisation sontaining costs (one) 610,000 Total selling and administrative expenses 52,661,000 Worley gathered the dots below for two of the many hospitals that it serves-University and Memorial (each hospital purchased medical supplies that had cost Worley $36,000 to buy from manufacturers) Nativity Activity Measure University Hemorial Member of deliveries 18 22 Number of manual orders 0 46 Number of electronie order o manber of line itens picked 100 230 Required: 1. Compute the total revenue that Worley would receive from University and Memorial 2. Compute the activity rate for each activity cost pool 3. Compute the total activity costs that would be assigned to University and Memorial 4. Compute Worley's customer margin for University and Memorial (Hint Do not overlook the $36,000 cost of goods sold that Worley incurred serving each hospital) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the total revenue that Worley would receive from University and Memorial Total Revenue University Memorial Complete this question by entering your Required 1 Required 2 Required 3 Required 4 Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate Customer deliveries per delivery Manual order processing per manual order Electronic order processing per electronic order Line item picking per line item picked Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 3 Required 4 Compute the total activity costs that would be assigned to University and Memorial. Total Activity Costs University Memorial Complete this Required 1 Required 2 Required 3 Required Compute Worley's customer margin for University and Memorial. (Hint: Do not overlook the $36,000 cost of goods sold that Worley incurred serving each hospital.) (Loss amounts should be indicated with a minus sign. Round your intermediate calculations to 2 decimal places. Round your final answers to the nearest whole number.) Customer Margin University Memorial
