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Worley Company buys surgical supplies from a varlety of manufacturers and then resells and dellvers these supplies to hundreds of hospltals. Worley sets its prices
Worley Company buys surgical supplies from a varlety of manufacturers and then resells and dellvers these supplies to hundreds of hospltals. Worley sets its prices for all hospitals by marking up Its cost of goods sold to those hospltals by 8%. For example, If a hospltal buys supplies from Worley that cost Worley $100 to buy from manufacturers, Worley would charge the hospltal $108 to purchase these supplies. For years, Worley belleved the 8% markup covered Its selling and adminlstratlve expenses and provided a reasonable profit. However, In the face of declining profits, Worley decided to Implement an actlvity-based costing system to Improve Its understanding of customer profitability. The company broke its selling and administratlve expenses Into five actlvitles as shown: Worley gathered the data below for two of the many hospitals it serves-University and Memorlal (each hospital purchased medical supplies that cost Worley $39,000 to buy from manufacturers): Requlred: 1. Compute the total revenue Worley would recelve from Unlversity and Memorlal. 2. Compute the actlvity rate for each actlvily cost pool. 3. Compute the total actlvity costs assigned to Unlversity and Memorlal. 4. Compute Worley's customer margin for UnIversity and Memorlal. (H/int Do not overlook the $39,000 cost of goods sold that Worley Incurred serving each hospltal.) Complete this question by entering your answers in the tabs below. Compute the total revenue Worley would receive from University and Memorial
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