Question

Activity-Based Costing for a Service Company Crosswinds Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs: Activity Activity Rate Room and meals $237 per day Radiology $334 per image Pharmacy $53 per physician order Chemistry lab $90 per test Operating room $740 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of days 3 days 11 days Number of images 4 images 5 images Number of physician orders 6 orders 8 orders Number of tests 3 tests 6 tests Number of operating room hours 4 hours 7 hours a. Determine the activity cost associated with each patient.

Answer 1

please find below solution..

Given that-
	Rate Room and meals		$237	per day
	Radiology		334	per image
	Pharmacy		53	per physician order
	Chemistry lab		90	per test
	Operating room		740	per operating room hour
		Patient -1	Patient -2
	number of days	3	11
	Number of image	4	5
	Number of physician orders	6	8
	Number of tests	3	6
	Number of operating room hours	4	7
	Computation of activity cost		Patient -1	rate	activity cost
	Rate Room and meals	number of days	3	$237	$711
	Radiology	Number of image	4	$334	$1,336
	Pharmacy	Number of physician orders	6	$53	$318
	Chemistry lab	Number of tests	3	$90	$270
	Operating room	Number of operating room hours	4	$740	$2,960
	total cost				$5,595
	Computation of activity cost		Patient -2	rate	activity cost
	Rate Room and meals	number of days	11	$237	$2,607
	Radiology	Number of image	5	$334	$1,670
	Pharmacy	Number of physician orders	8	$53	$424
	Chemistry lab	Number of tests	6	$90	$540
	Operating room	Number of operating room hours	7	$740	$5,180
	total cost				$10,421