Answer:
A. Customer deliveries $90
Manual order processing $74
Electronic order processing $21
Line item picking $1.95
B. CITY GENERAL
Activity cost pools City General
Customer deliveries $900
Manual order processing $0
Electronic order processing $210
Line item picking $234
Total Activity Costs $1,344
COUNTRY GENERAL
Activity cost pools Country General
Customer deliveries $1,800
Manual order processing $2,960
Electronic order processing $0
Line item picking $546
Total Activity Costs $5,306
Explanation:
a. Computation for the activity rate for each activity cost pool
Using this formula
Activity rate = Total cost / Total activity
Let plug in the formula
Activity cost pools Total Cost (a) Total activity (b) Activity rate (a/b)
Customer deliveries $630,000/ 7,000 =$90
Manual order processing $444,000/ 6,000 =$74
Electronic order processing $231,000/ 11,000 =$21
Line item picking $955,500/ 490,000=$1.95
Therefore the activity rate for each activity cost pool are:
Customer deliveries $90
Manual order processing $74
Electronic order processing $21
Line item picking $1.95
b. Computation for the total activity costs that would be assigned to City General and County General
Using this formula
Activity cost assigned = Actual activity * Activity rates
Cost drivers by product Overhead cost assigned
CITY GENERAL
Activity cost pools Activity rate (a) City General(b) City General (a*b)
Customer deliveries $90 *10 =$900
Manual order processing $74*0=$0
Electronic order processing $21* 10=$210
Line item picking $1.95*120=$234
Total Activity Costs $1,344
($900+$0+$210+$234)
COUNTRY GENERAL
Activity cost pools Activity rate (a) Country General(b) Country General (a*b)
Customer deliveries $90 *20 =$1,800
Manual order processing $74*40=$2,960
Electronic order processing $21* 0=$0
Line item picking $1.95*280=$546
Total Activity Costs $5,306
($1,800+$2,960+$0+546)
Therefore The the total activity costs that would be assigned to City General and County General
are:
CITY GENERAL
Activity cost pools City General
Customer deliveries $900
Manual order processing $0
Electronic order processing $210
Line item picking $234
Total Activity Costs $1,344
COUNTRY GENERAL
Activity cost pools Country General
Customer deliveries $1,800
Manual order processing $2,960
Electronic order processing $0
Line item picking $546
Total Activity Costs $5,306
