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hapter 7 Saved 16 Exercise 7-10 Customer Profitability Analysis [LO7-3, LO7-4, LO7-5) 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 9%. For example, if a hospital buys supplies from Worley that cost Worley $100 to buy from manufacturers, Worley would charge the hospital $109 to purchase these supplies ints For years, Worley believed that the 9% 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: . Activity Cost Pool (Activity Neasure) Custoner deliveries (Number of deliveries) Manual order processing (Number of manual orders) Electronie order processing (Number of electronic orders) Line item picking (Nunber of line items picked) Other organization-sustaining costs (None Total selling and administrative expenses Hint 415,000 5,000 deliveries 675,000 9,000 ozders 280,000 14,000 orders 906,500 490,000 line items 68O,000 Print $2,956,500 ReferencesWorley Worley gathered the data below for two of the many hospitals that it serves-University and Memorial (each hospital purchased medical supplies that had cost Worley $33,000 to buy from manufacturers) vity Heasure Univeraity emorial Number of deliveries Number of manual orders Number of electronie orders Number of line itens picked 14 49 130 280 Required: 1. Compute the total revenue that Worley would receive from Univirsity and Memorial. 2. Compute the activity rate for each activity cost pool. 3. Compute the total activity costs that would be assigned to University and Memorial. 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.) Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 3 Required 4 Saved apter 7 6 16 rotaL seiiing ana aaministrative expenses Worley gathered the data below for two of the many hospitals that it serves-University and Memorial (each hospital purchased medical supplies that had cost Worley $33,000 to buy from manufacturers): Activity Heasure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked 28 49 14 14 130 280 eBook Required 1. Compute the total revenue that Worley would receive from University and Memorial 3. Compute the total activity costs that would be assigned to University and Memorial. incurred serving each hospital.) Hint activity rate for each activity cost pool .Compute the ttl actvrhy costs thawould 1oe assignedto Univerity and Memorial 4. Compute Worley's customer margin for University and Memorial. (Hint Do not overlook the $33.000 cost of goods sold that Worley Print ferences Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the total revenue that Worley would receive from University and Memorial University Memorial Required 2> votai seiiing ana aaministratave expenses Worley gathered the data below for two of the many hospitals that it serves-University and Memorial (each hospital purchased medical supplies that had cost Worley $33,000 to buy from manufacturers): 10 points Activity Neasure Nunber of deliveries Nunber of manual orders Number of electronic orders Number of line items picked University Remor 28 49 14 14 130 280 Required: 1. Compute the total revenue that Worley would receive from University and Memorial. 2. Compute the activity rate for each activity cost pool. 3. Compute the total activity costs that would be assigned to University and Memorial 4. Compute Worley's customer margin for University and Memorial. (Hint Do not overlook the $33,000 cost of goods sold that Worley Hint Print incurred serving each hospital.) References Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 3 Required Compute the activity rate for each activity cost pool.(Round your answers to 2 decimal places.) Activity Cost Pool Customer deliveriets Manual order processing Electronic order processing Line iRem picking Rate per delivery per manual order per electronic order per line item picked 16 Worley gathered the data below for two of the many hospitals that it serves-University and Memorial (each hospital purchased medical supplies that had cost Worley $33,000 to buy from manufacturers) nts Activity Measure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked University Memor i 14 28 49 14 130 eBook 280 TRequired 1. Compute the total revenue that Worley would receive from University and Memorial. 2. Compute the activity rate for each activity cost pool. 3. Compute the total activity costs that would be assigned to University and Memorial. 4. Compute Worley's customer margin for University and Memorial. (Hint Do not overlook the $33,000 cost of goods sold that Wo incurred serving each hospital,) Print eferences Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 3 Required 4 Compute the total activity costs that would be assigned to University and Memorial. Cost Memorial K Required 2 Required 4 16 Worley gathered the data below for two of the many hospitals that it serves-University and Memorial (each hospital purchased medical supplies that had cost Worley $33,000 to buy from manufacturers): ts University Memorial Activity Heasure Number of deliveries Number of manual orders Number of electronic orders Number of line items picked 28 49 14 14 130 280 eBook Required 1. Compute the total revenue that Worley would receive from University and Memorial 2. Compute the activity rate for each activity cost pool. 3. Compute the total activity costs that would be assigned to University and Memorial. 4. Compute Worley's customer margin for University and Memorial. (Hint Do not overlook the $33,000 cost of goods sold that W incurred serving each hospital.) Hint Print ferences Complete this question by entering your answers in the tabs below. Required 1Required 2 Required 3 Required 4 Memorial. (Hint: Do not overlook the $33,000 cost of goods sold that Compute Worley's customer margin for University and Worley incurred serving each hospital.) (Loss amounts should calculations to 2 decimal places. Round your final answers to the nearest whole number.) be indicated with a minus sign. Round your intermediate Customer Margin Memorial Required 3 Required 4 KPrev 16 of 18l Next

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