Med Max buys surgical supplies from a variety of manufacturersand then resells and delivers these supplies to dozens ofhospitals. In the face of declining profits, Med Max decided toimplement an activity-based costing system to improve itsunderstanding of the costs incurred to serve each hospital. Thecompany broke its selling and administrative expenses into fouractivities as shown below:
| Activity Cost Pool | Activity Measure | Total Cost | Total Activity |
| Customer deliveries | Number of deliveries | $ | 426,400 | 5,200 | deliveries |
| Manual order processing | Number of manual orders | | 323,400 | 4,200 | orders |
| Electronic order processing | Number of electronic orders | | 205,740 | 12,700 | orders |
| Line item picking | Number of line items picked | | 567,000 | 420,000 | line items |
| Total selling and administrative expenses | | $ | 1,522,540 | | |
|
Med Max gathered the data below for two of the many hospitalsthat it serves—City General and County General:
| Activity |
| Activity Measure | City General | County General |
| Number of deliveries | 20 | 40 |
| Number of manual orders | 0 | 80 |
| Number of electronic orders | 15 | 0 |
| Number of line items picked | 120 | 280 |
|
Required:
1. Compute the activity rate for each activity cost pool.
2. Compute the total activity costs that would be assigned toCity General and County General.
