Question

Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundred

2. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Activity Rate Activity Co

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Answer #1

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1 Revenue from university and Memorial
Cost price Mark Up Mark Up Amount Revenue
A B (C = A*B) D = A+C
University               35000 8%                              2800           37800
Memorial               35000 8%                              2800           37800
2 Activity rate for each activity cost pool
Activity Activity measure Total Activity Total Cost Cost/Activity
A B C D E=D/C
Customer Deliveries Number of Deliveries                 5000     420000 84
Manual order Processing Number of manual orders                 5000     355000 71
Electronic Order Processing Number of electronic orders              13000     299000 23
Line Item picking Number of line items picked            460000     874000                   1.9
3 Activity cost assigned to University and Memorial
University
Activity Measure No of Activity Cost/Activity Total Cost Assigned
A B C D=B*C
Number of Deliveries 15 84 1260
Number of manual orders 0 71                                     -  
Number of electronic orders 11 23 253
Number of line items picked 200                   1.9 380
Total Cost assigned 1893
Memorial
Activity Measure No of Activity Cost/Activity Total Cost Assigned
A B C D=B*C
Number of Deliveries 23 84 1932
Number of manual orders 46 71 3266
Number of electronic orders 0 23                                     -  
Number of line items picked 210                   1.9 399
Total Cost assigned 5597
4 Customer Margin
Particulars Formula Used University Memorial
A Revenue from Q1        37800       37800
B Cost of material From question        35000       35000
C Activity Cost From Q3           1893          5597
D Profit A-B-C              907       (2797)
Margin D/A 2.4% -7.4%
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