Activity Customer Deliveries Manual Order Processing Electronic Order Processing Line Item Picking Activity Measure Cost Pool $ 400,000 5,000 deliveries $ 300,000 4,000 orders $200,000 12,500 orders $ 500,000 400,000 line items Activity Rate per delivery per order per order per line item St. Bibiana's Usage 12 12 256 Total MOH Cost General Hospital Usage Cost 50 50 300 5) RKJW & Co. is a medical wholesaler which sells medical supplies to hospitals and urgent care centers in the upper Midwest. To assess the profitability of its customers, RKJW has decided to implement an activity-based profitability analysis with the hope of reducing costs Using the data provided, determine the activity rate for each activity, then compute the total costs, assigned to each of St. Bibiana's Medical Center and General Hospital, as well as the contribution margin ratio of each client. Revenue Cost of Goods Sold Variable OH Contribution Margin CM Ratio St. Bibiana's General Hospital S $ 30,000 20,000 24,000 $ 16,000 $

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Activity
Customer Deliveries
Manual Order Processing
Electronic Order Processing
Line Item Picking
Cost Pool
$ 400,000
$ 300,000
$ 200,000
$ 500,000
Activity Measure
5,000 deliveries
4,000 orders
12,500 orders
400,000 line items
Activity Rate
per delivery
per order
per order
per line item
St. Bibiana's
Usage
12
12
256
Total MOH
Cost
General Hospital
Usage
Cost
50
50
300
5) RKJW & Co. is a medical wholesaler which sells medical supplies to hospitals and urgent
care centers in the upper Midwest. To assess the profitability of its customers, RKJW has
decided to implement an activity-based profitability analysis with the hope of reducing costs
Using the data provided, determine the activity rate for each activity, then compute the total
costs, assigned to each of St. Bibiana's Medical Center and General Hospital, as well as the
contribution margin ratio of each client.
Revenue
Cost of Goods Sold
Variable OH
Contribution Margin
CM Ratio
St. Bibiana's General Hospital
24,000 $
30,000
16,000 $
20,000
$
$
Transcribed Image Text:Activity Customer Deliveries Manual Order Processing Electronic Order Processing Line Item Picking Cost Pool $ 400,000 $ 300,000 $ 200,000 $ 500,000 Activity Measure 5,000 deliveries 4,000 orders 12,500 orders 400,000 line items Activity Rate per delivery per order per order per line item St. Bibiana's Usage 12 12 256 Total MOH Cost General Hospital Usage Cost 50 50 300 5) RKJW & Co. is a medical wholesaler which sells medical supplies to hospitals and urgent care centers in the upper Midwest. To assess the profitability of its customers, RKJW has decided to implement an activity-based profitability analysis with the hope of reducing costs Using the data provided, determine the activity rate for each activity, then compute the total costs, assigned to each of St. Bibiana's Medical Center and General Hospital, as well as the contribution margin ratio of each client. Revenue Cost of Goods Sold Variable OH Contribution Margin CM Ratio St. Bibiana's General Hospital 24,000 $ 30,000 16,000 $ 20,000 $ $
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