x buys surgical supplies from a variety of manufacturers and then resells and de

Question

x buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to dozens of Med Ma hospitals. In the face of declining fits, Med Max decided to implement an activity-based costing system to improve its sts incurred to serve each hospital. The company broke its selling and administrative expenses into four activities as shown below Total Activity 5,000 deliveries 4,000 ordérs 11,000 orders Activity Measure Total Cost Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Number of deliveries Number of manual orders Number of Number of line items picked 395,000 459,000 515,000 405,000 electronic orders 403,000 line items Med Max gathered the data below for two of the many hospitals that it serves-City General and County General: Activity City General County General Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked 10 21 39 10 100 251 Compute the total activity costs that would be assigned to County General. Do not round intermediate calculations. Round your final answer to the nearest integer. Ignore the dollar sign.

Explanation / Answer

Activity Cost Pool Estimated Expected Activity Activity Rate ( Expected Cost / Expected Activity) Activity of Country general Alloacted Cost (Activity Rate * Activity of Country general) Overhead Cost Customer Deliveries $ 3,95,000 5,000 79.00 21 1,659.00 Manual Order Processing $ 4,59,000 4,000 114.75 39 4,475.25 Electronic Order processing $ 5,15,000 11,000 46.82 0 -    Line Item Picking $ 4,05,000 4,03,000 1.00 251 252.25 Total Cost 6,387

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