Assume a service company has implemented an activity-based costing system with five activities as shown below:| Activity Cost Pool (Activity Measure) | Total Cost | Total Activity ||---------------------------------------|------------|----------------|| Customer deliveries (Number of deliveries) | $400,000 | 8,000 deliveries || Manual order processing (Number of manual orders) | $280,000 | 5,000 manual orders || Electronic order processing (Number of electronic orders) | $150,000 | 15,000 electronic orders || Line item picking (Number of line items picked) | $450,000 | 375,000 line items || Other organization-sustaining costs (None) | $300,000 | |The company serves numerous customers, two of which include Hospital A and Hospital B. The activity demands pertaining to these two customers are as follows:| Activity Measure | Hospital A | Hospital B ||-------------------|------------|------------|| Number of deliveries | 8 | 25 || Number of manual orders | 0 | 30 || Number of electronic orders | 15 | 0 || Number of line items picked | 115 | 250 |**Question:**How much total activity cost should be assigned to Hospital A for internal management purposes?- The answer is provided as a Multiple Choice selection with the option shown: $795### Explanation of Calculations (not shown in the image):1. **Customer Deliveries Cost for Hospital A:** - Cost per delivery = $400,000 / 8,000 = $50 per delivery - Total cost for Hospital A = 8 deliveries * $50 = $4002. **Electronic Order Processing Cost for Hospital A:** - Cost per electronic order = $150,000 / 15,000 = $10 per order - Total cost for Hospital A = 15 orders * $10 = $1503. **Line Item Picking Cost for Hospital A:** - Cost per line item = $450,000 / 375,000 = $1.20 per item - Total cost for Hospital A = 115 items * $1.20 = $1384. **Total Cost for Hospital A:** - $400 (deliveries) + $150 (electronic orders) + $138 (line items) = $688(Note: The answer does not

Name: Assume a service company has implemented an activity-based costing sy
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Description: Assume a service company has implemented an activity-based costing system with five activities as shown below:| Activity Cost Pool (Activity Measure) | Total Cost | Total Activity ||---------------------------------------|------------|--------------

Using activity based costing, the overhead is applied to the job depending on various activities.

Business

Accounting

ssume a service company has implemented an activity-based costing system with five activities as shown below: Activity Cost Pool (Activity Measure) Customer deliveries (Number of deliveries) Manual order processing (Number of manual orders) Electronic order processing (Number of electronic orders) Line item picking (Number of line items picked) Other organization-sustaining costs (None) Total Cost Total Activity 8,000 deliveries 5,000 manual orders $ 400,000 $ 280,000 $ 150,000 $ 450,000 $ 300,000 15,000 electronic orderS 375,000 line items The company serves numerous customers, two of which include Hospital A and Hospital B. The activity demands pertaining to these two customers are as follows: Activity Activity Measure Hospital A Hospital B 8 25 Number of deliveries 30 Number of manual orders 15 Number of electronic orders 115 250 Number of line items picked How much total activity cost should be assigned to Hospital A for internal management purposes? Multiple Choice $785 Next >

ssume a service company has implemented an activity-based costing system with five activities as shown below: Activity Cost Pool (Activity Measure) Customer deliveries (Number of deliveries) Manual order processing (Number of manual orders) Electronic order processing (Number of electronic orders) Line item picking (Number of line items picked) Other organization-sustaining costs (None) Total Cost Total Activity 8,000 deliveries 5,000 manual orders $ 400,000 $ 280,000 $ 150,000 $ 450,000 $ 300,000 15,000 electronic orderS 375,000 line items The company serves numerous customers, two of which include Hospital A and Hospital B. The activity demands pertaining to these two customers are as follows: Activity Activity Measure Hospital A Hospital B 8 25 Number of deliveries 30 Number of manual orders 15 Number of electronic orders 115 250 Number of line items picked How much total activity cost should be assigned to Hospital A for internal management purposes? Multiple Choice $785 Next >

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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3 manage costs? 10-31. Activity-Based Costing of Customers Rupert's Appliance Warehouse (RAW) delivers appliances to retailers throughout the city. The firm adds 6 percent to the cost of the appliances to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. The finance team at RAW has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities follow: 100 Activity Processing order.. Loading truck... Delivering order..... Billing..... Total overhead. .. Cost Driver Number of orders Number of items Number of orders Number of invoices Order value (total) . . . . . Number of orders.. Total number of items. Number of invoices. Activity Cost $ 90,000 180,000 108,000 70,000 $448,000 Two of Rupert's customers are McLean Designs and Neveux Appliances. Data for orders and deliveries to these two customers follow: .. Cost Driver Volume 3,000 orders 60,000 items 3,000 orders 2,500 invoices McLean Designs…
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Conlon Enterprises reports the following information about resources. Cost Driver Rate Cost Driver Volume Resources used Setups $ 370 per run 425 runs Clerical 50 per page 2,500 pages typed Resources supplied Setups $ 160,450 Clerical 133,400 Sales revenue totaled $315,000. Required: a. Prepare a traditional income statement. b. Prepare an activity-based income statement.
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