3. Compute the total activity costs that would be assigned to University and Mem
ID: 2743674 • Letter: 3
Question
3. Compute the total activity costs that would be assigned to University and Memorial. (Round your intermediate calculations and final answers to 2 decimal places.)
4. Compute Worley’s customer margin for University and Memorial. (Hint: Do not overlook the $33,000 cost of goods sold that Worley incurred serving each hospital.) (Loss amount should be indicated with a minus sign. Round your intermediate calculations and final answers to 2 decimal places.)
The second problem I need help with is the following
Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 6%. For example, if a hospital buys supplies from Worley that had cost Worley $100 to buy from manufacturers, Worley would charge the hospital $108 to purchase these supplies For years, Worley believed that the 6% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown Total Cost 5 534,000 ,000 deliveries 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) 518,000 240,000 580,500 700,000 7,000 orders 12,000 orders 430,000 line items Total selling and administrative expenses 52,572,5OO Worley gathered the data below for two of the many hospitals that it serves-University and Memorial (both hospitals purchased a total quantity of medical supplies that had cost Worley $33,000 to buy from its manufacturers): Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked University 13 150 1. Compute the total revenue that Worley would receive from University and Memorial. University 5 34,980 5 34,980Explanation / Answer
Solution.
Q 1 .
3. Calculation for total activity costs that would be assigned to University and Memorial..
4. Calculation for Worley’s customer margin for University and Memorial.
Activity masure Cost per activity University Memorial University Memorial Number of deliveries 89.00 13 23.00 1,157.00 2,047.00 Number of manual order 74.00 0 48.00 - 3,552.00 Number of electronic orders 20.00 12 - 240.00 - Number of line items picked 1.35 150 270 202.50 364.50 Total 1,599.50 5,963.50Related Questions
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