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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 Electronic order processing Line item picking Total selling and administrative expenses Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Total Activity 4,700 deliveries 3,700 orders Total Cost $ 361,900 266,400 191,540 518,000 370,000 line items $ 1,337,840 12,200 orders Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Required: Activity City General County General 15 30 0 60 20 130 0 290 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. Required 1 Required 2 Required 2 Compute the total activity calculations.) It would be assigned to City General and County General. (Do not round intermediate Activity Cost Pool City General ABC Cost County General ABC Cost Customer deliveries Manual order processing Electronic order processing Line item picking Total activity costs

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 Electronic order processing Line item picking Total selling and administrative expenses Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Total Activity 4,700 deliveries 3,700 orders Total Cost $ 361,900 266,400 191,540 518,000 370,000 line items $ 1,337,840 12,200 orders Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Required: Activity City General County General 15 30 0 60 20 130 0 290 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. Required 1 Required 2 Required 2 Compute the total activity calculations.) It would be assigned to City General and County General. (Do not round intermediate Activity Cost Pool City General ABC Cost County General ABC Cost Customer deliveries Manual order processing Electronic order processing Line item picking Total activity costs

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 Electronic order processing Line item picking Total selling and administrative expenses Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Total Activity 4,700 deliveries 3,700 orders Total Cost $ 361,900 266,400 191,540 518,000 370,000 line items $ 1,337,840 12,200 orders Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Required: Activity City General County General 15 30 0 60 20 130 0 290 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. Required 1 Required 2 Required 2 Compute the total activity calculations.) It would be assigned to City General and County General. (Do not round intermediate Activity Cost Pool City General ABC Cost County General ABC Cost Customer deliveries Manual order processing Electronic order processing Line item picking Total activity costs
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 Manual order processing Electronic order processing Line item picking Total selling and administrative expenses Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Total Activity 4,700 deliveries 3,700 orders Total Cost $ 361,900 266,400 191,540 518,000 370,000 line items $ 1,337,840 12,200 orders Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Required: Activity City General County General 15 30 0 60 20 130 0 290 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. Required 1 Required 2 Required 2 Compute the total activity calculations.) It would be assigned to City General and County General. (Do not round intermediate Activity Cost Pool City General ABC Cost County General ABC Cost Customer deliveries Manual order processing Electronic order processing Line item picking Total activity costs
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