Worley Company buys surgical supplies from a variety of manufacturers and then resels 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 5%. For example, a hospital buys supples from Worley that cost Worley $100 to buy from manufacturers, Worley would charge the hospital $105 to purchase these supplies. For years, Worley believed that the 5% maricup covered its selling and administrative expenses and provided a ressonable profit. However, in the face of declining profits, Worley decided to implement an activity-based costing system to help improve to 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) $ 520,202 5,202 deliveries Manual order processing (Number of manual orders) 248,00 4,202 orders Electronic order processing (Number of clectronic orders) 200,202 12,5 orders Line item picking (Number of line items picked) 450, 450,eea line items Other organization-sustaining costs (none) 622,202 Total selling and administrative expenses $2,000,000 Worley gathered the data below for two of the many hospitals that it serves-University and Memorial (each hospital purchased medical supplies that had cost Worley $30,000 to buy from manufacturers): Activity Activity Measure University Memorial Number of deliveries le Number of manual orders Number of electronic orders Number of line itens picked 120 250 25 3e @ 15 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 $30,000 cost of goods sold that Worley Thcurred serving each hospital.) Complete this question by entering your answers in the tabs below. Raduired 1 Required 2 Required 3 Required 4 Compute the total revenue that Worley wauld receive from University and Memorial. Total Rovanu University Memorial Required Required 2 > Required 1 Required 2 Raduired 3 quired 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 tempicking perline tam picked Required 1 Required 2 Raduired 3 Rigured Compute the total activity costs that would be assigned to University and Memorial. Total Activity Cocts University Memorial Required Required 2 Raduired Rund 4 Compute Worley's customer margin for University and Memorial. (Hint: Do not overlook the $30,000 cost of goods sold that Worley incurred serving each hospital.) (Loss amounts should be indicated with a minus sign) Customer Margin University || Memorial
