Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 For example, if a hospital buys supplies from Worley that cost Worley $ to buy from manufacturers, Worley would charge the hospital $ to purchase these supplies. For years, Worley believed that the markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits, Worley decided to implement an activitybased costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown: Activity Cost Pool Activity Measure Total Cost Total Activity Customer deliveries Number of deliveries $ deliveries Manual order processing Number of manual orders orders Electronic order processing Number of electronic orders orders Line item picking Number of line items picked line items Other organizationsustaining costs None Total selling and administrative expenses $ Worley gathered the data below for two of the many hospitals that it servesUniversity and Memorial each hospital purchased medical supplies that had cost Worley $ to buy from manufacturers: Activity Measure Activity University Memorial Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Required: Compute the total revenue that Worley would receive from University and Memorial. Compute the activity rate for each activity cost pool. Compute the total activity costs that would be assigned to University and Memorial. Compute Worleys customer margin for University and Memorial. Hint: Do not overlook the $ cost of goods sold that Worley incurred serving each hospital.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 For example, if a hospital buys supplies from Worley that cost Worley $ to buy from manufacturers, Worley would charge the hospital $ to purchase these supplies. For years, Worley believed that the markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits, Worley decided to implement an activitybased costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown: Activity Cost Pool Activity Measure Customer deliveries Number of deliveries Manual order processing Number of manual orders Electronic order processing Number of electronic orders Line item picking Number of line items picked Other organizationsustaining costs None Total selling and administrative expenses Worley gathered the data below for two of the many hospitals that it servesUniversity and Memorial each hospital purchased medical supplies that had cost Worley $ to buy from manufacturers: Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Required: Compute the total revenue that Worley would receive from University and Memorial. Compute the activity rate for each activity cost pool. Compute the total activity costs that would be assigned to University and Memorial. Compute Worley's customer margin for University and Memorial. Hint Do not overlook the $ cost of goods sold that Worley incurred serving each hospital. Complete this question by entering your answers in the tabs below. Compute Worley's customer margin for University and Memorial. Hint: Do not overlook the $ cost of goods sold that Worley incurred serving each hospital.Loss amounts should be indicated with a minus sign. Round your intermediate calculations to decimal places. Round your final answers to the nearest whole number.
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 For example, if a hospital buys supplies from Worley that cost Worley $ to buy from manufacturers, Worley would charge the hospital $ to purchase these supplies.
For years, Worley believed that the markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits, Worley decided to implement an activitybased costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown:
Activity Cost Pool Activity Measure Total Cost Total Activity
Customer deliveries Number of deliveries $ deliveries
Manual order processing Number of manual orders orders
Electronic order processing Number of electronic orders orders
Line item picking Number of line items picked line items
Other organizationsustaining costs None
Total selling and administrative expenses $
Worley gathered the data below for two of the many hospitals that it servesUniversity and Memorial each hospital purchased medical supplies that had cost Worley $ to buy from manufacturers:
Activity Measure Activity
University Memorial
Number of deliveries
Number of manual orders
Number of electronic orders
Number of line items picked
Required:
Compute the total revenue that Worley would receive from University and Memorial.
Compute the activity rate for each activity cost pool.
Compute the total activity costs that would be assigned to University and Memorial.
Compute Worleys customer margin for University and Memorial. Hint: Do not overlook the $ cost of goods sold that Worley incurred serving each hospital.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 For example, if a
hospital buys supplies from Worley that cost Worley $ to buy from manufacturers, Worley would charge the hospital $ to
purchase these supplies.
For years, Worley believed that the markup covered its selling and administrative expenses and provided a reasonable profit.
However, in the face of declining profits, Worley decided to implement an activitybased costing system to help improve its
understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown:
Activity Cost Pool Activity Measure
Customer deliveries Number of deliveries
Manual order processing Number of manual orders
Electronic order processing Number of electronic orders
Line item picking Number of line items picked
Other organizationsustaining costs None
Total selling and administrative expenses
Worley gathered the data below for two of the many hospitals that it servesUniversity and Memorial each hospital purchased
medical supplies that had cost Worley $ to buy from manufacturers:
Activity Measure
Number of deliveries
Number of manual orders
Number of electronic orders
Number of line items picked
Required:
Compute the total revenue that Worley would receive from University and Memorial.
Compute the activity rate for each activity cost pool.
Compute the total activity costs that would be assigned to University and Memorial.
Compute Worley's customer margin for University and Memorial. Hint Do not overlook the $ cost of goods sold that
Worley incurred serving each hospital.
Complete this question by entering your answers in the tabs below.
Compute Worley's customer margin for University and Memorial. Hint: Do not overlook the $ cost of goods sold that
Worley incurred serving each hospital.Loss amounts should be indicated with a minus sign. Round your intermediate
calculations to decimal places. Round your final answers to the nearest whole number.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started