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Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Customer deliveries Manual order processing Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Electronic order processing Line item picking Total selling and administrative expenses Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity City General 20 0 20 120 Required 1 Required 2 Activity Measure Number of deliveries Number of manual orders Number of electronic orders. Number of line items picked County General Customer deliveries Manual order processing Electronic order processing Line item picking 40 80 Required: 1. Compute the activity rate for each activity cost pool. 2. Compute the total activity costs that would be assigned to City General and County General. Complete this question by entering your answers in the tabs below. 0 280 < Required 1 Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool Total Cost $ 313,900 224,400 180,540 379,500 $ 1,098,340 Activity Rate per delivery per manual order per electronic order per line item picked Required 2 > Total Activity 4,300 deliveries 3,300 orders 11,800 orders 330,000 line items

Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Customer deliveries Manual order processing Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Electronic order processing Line item picking Total selling and administrative expenses Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity City General 20 0 20 120 Required 1 Required 2 Activity Measure Number of deliveries Number of manual orders Number of electronic orders. Number of line items picked County General Customer deliveries Manual order processing Electronic order processing Line item picking 40 80 Required: 1. Compute the activity rate for each activity cost pool. 2. Compute the total activity costs that would be assigned to City General and County General. Complete this question by entering your answers in the tabs below. 0 280 < Required 1 Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool Total Cost $ 313,900 224,400 180,540 379,500 $ 1,098,340 Activity Rate per delivery per manual order per electronic order per line item picked Required 2 > Total Activity 4,300 deliveries 3,300 orders 11,800 orders 330,000 line items

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Customer deliveries Total Cost $ 313,900 224,400 180,540 Manual order processing Electronic order processing Line item picking 379,500 Total selling and administrative expenses $ 1,098,340 Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Required 1 City General 20 0 20 120 Required 2 Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked County General Required: 1. Compute the activity rate for each activity cost pool. 2. Compute the total activity costs that would be assigned to City General and County General. Customer deliveries Manual order processing Electronic order processing Line item picking Complete this question by entering your answers in the tabs below. 40 80 0 280 Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate per delivery per manual order < Required 1 per electronic order per line item picked Required 2 > Total Activity 4,300 deliveries 3,300 orders 11,800 orders 330,000 line items.
Transcribed Image Text:Med Max buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of hospitals. In the face of declining profits, Med Max decided to implement an activity-based costing system to improve its understanding of the costs incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below: Activity Cost Pool Customer deliveries Total Cost $ 313,900 224,400 180,540 Manual order processing Electronic order processing Line item picking 379,500 Total selling and administrative expenses $ 1,098,340 Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Required 1 City General 20 0 20 120 Required 2 Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked County General Required: 1. Compute the activity rate for each activity cost pool. 2. Compute the total activity costs that would be assigned to City General and County General. Customer deliveries Manual order processing Electronic order processing Line item picking Complete this question by entering your answers in the tabs below. 40 80 0 280 Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate per delivery per manual order < Required 1 per electronic order per line item picked Required 2 > Total Activity 4,300 deliveries 3,300 orders 11,800 orders 330,000 line items.
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