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 Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Manual order processing Electronic order processing Line item picking Total selling and administrative expenses Total Cost $ 387,100 Total Activity 4,900 deliveries 288,600 3,900 orders 197,160 12,400 orders 507,000 390,000 $ 1,379,860 Med Max gathered the data below for two of the many hospitals that it serves—City General and County General: Activity Activity Measure 20 County General 40 0 80 20 0 110 270 City General Number of deliveries Number of manual orders Number of electronic orders Number of line items picked Required: Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal 1. places.) Activity Cost Pool Customer deliveries Manual order processing $ $ Activity Rate per delivery per manual order line items Electronic order processing $ Line item picking $ per electronic order per line item picked 2. Compute the total activity costs that would be assigned to City General and County General. (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations.) City General: Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total activity costs ABC Cost $ $ County General: Activity Cost Pool Customer deliveries Manual order processing Electronic order processing Line item picking Total activity costs ABC Cost $ $
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