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.

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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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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 $ 400,000 $ 280,000 $ 150,000 $ 450,000 $ 300,000 Customer deliveries (Number of deliveries) Manual order processing (Number of manual orders) 8,000 deliveries 5,000 manual orders Electronic order processing (Number of electronic orders) 15,000 electronic orders Line item picking (Number of line items picked) Other organization-sustaining costs (None) 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 Number of deliveries 12 25 Number of manual orders 30 Number of electronic orders 15 Number of line items picked 130 250 How much total activity cost should be assigned to Hospital A for internal management purposes?
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