Question
In: Accounting
Product Costing and Decision Analysis for a Service Company Pleasant Stay Medical Inc. wishes to determine...
Product Costing and Decision Analysis for a Service Company
Pleasant Stay Medical Inc. wishes to determine its product
costs. Pleasant Stay offers a variety of medical procedures
(operations) that are considered its “products.” The overhead has
been separated into three major activities. The annual estimated
activity costs and activity bases follow:
| Activity | Budgeted Activity Cost | Activity Base |
| Scheduling and admitting | $432,000 | Number of patients |
| Housekeeping | 4,212,000 | Number of patient days |
| Nursing | 5,376,000 | Weighted care unit |
| Total costs | $10,020,000 |
Total “patient days” are determined by multiplying the number of
patients by the average length of stay in the hospital. A weighted
care unit (wcu) is a measure of nursing effort used to care for
patients. There were 192,000 weighted care units estimated for the
year. In addition, Pleasant Stay estimated 6,000 patients and
27,000 patient days for the year. (The average patient is expected
to have a a little more than a four-day stay in the
hospital.)
During a portion of the year, Pleasant Stay collected patient information for three selected procedures, as follows:
| Activity-Base Usage | ||
| Procedure A | ||
| Number of patients | 280 | |
| Average length of stay | x 6 | days |
| Patient days | 1,680 | |
| Weighted care units | 19,200 | |
| Procedure B | ||
| Number of patients | 650 | |
| Average length of stay | x 5 | days |
| Patient days | 3,250 | |
| Weighted care units | 6,000 | |
| Procedure C | ||
| Number of patients | 1,200 | |
| Average length of stay | x 4 | days |
| Patient days | 4,800 | |
| Weighted care units | 24,000 |
Private insurance reimburses the hospital for these activities at a fixed daily rate of $406 per patient day for all three procedures.
Required:
1. Determine the activity rates.
| Activity | Activity Rate | |
| Scheduling and admitting | $ | per patient |
| Housekeeping | $ | per pd |
| Nursing | $ | per wcu |
2. Determine the activity cost for each procedure.
| Activity | Total Activity Cost by Procedure |
| Procedure A | $ |
| Procedure B | $ |
| Procedure C | $ |
3. Determine the excess or deficiency of reimbursements to activity cost.
| Activity | Excess (deficiency) of reimbursement over activity cost |
| Procedure A | $ |
| Procedure B | $ |
| Procedure C | $ |
Hospital management has decided to further investigate the nursing effort. Determine the weighted care units per patient days for each procedure. Round to one decimal place.
Procedure A weighted care units per patient day:
Procedure B weighted care units per patient day:
Procedure C weighted care units per patient day:
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Pleasant Stay Medical Inc. wishes to determine its product costs. Pleasant Stay offers a variety of...
Pleasant Stay Medical
Inc. wishes to determine its product costs. Pleasant Stay offers a
variety of medical procedures (operations) that are considered its
“products.” The overhead has been separated into three major
activities. The annual estimated activity costs and activity bases
follow:
Activity
Budgeted Activity Cost
Activity Base
Scheduling and admitting
$432,000
Number of patients
Housekeeping
4,212,000
Number of patient days
Nursing
5,376,000
Weighted care unit
Total costs
$10,020,000
Total “patient days”
are determined by multiplying the number of patients...
Product Costing and Decision Analysis for a Service Company Blue Star Airline provides passenger airline service,...
Product Costing and Decision Analysis for a Service Company
Blue Star Airline provides passenger airline service, using
small jets. The airline connects four major cities: Charlotte,
Pittsburgh, Detroit, and San Francisco. The company expects to fly
170,000 miles during a month. The following costs are budgeted for
a month:
Fuel
$2,120,000
Ground personnel
788,500
Crew salaries
850,000
Depreciation
430,000
Total costs
$4,188,500
Blue Star management wishes to assign these costs to individual
flights in order to gauge the profitability of...
Product Costing and Decision Analysis for a Service Company Blue Star Airline provides passenger airline service,...
Product Costing and Decision Analysis for a Service Company
Blue Star Airline provides passenger airline service, using
small jets. The airline connects four major cities: Charlotte,
Pittsburgh, Detroit, and San Francisco. The company expects to fly
170,000 miles during a month. The following costs are budgeted for
a month:
Fuel
$2,120,000
Ground personnel
788,500
Crew salaries
850,000
Depreciation
430,000
Total costs
$4,188,500
Blue Star management wishes to assign these costs to individual
flights in order to gauge the profitability of...
Product Costing and Decision Analysis for a Service Company Blue Star Airline provides passenger airline service,...
Product Costing and Decision Analysis for a Service Company
Blue Star Airline provides passenger airline service, using
small jets. The airline connects four major cities: Charlotte,
Pittsburgh, Detroit, and San Francisco. The company expects to fly
170,000 miles during a month. The following costs are budgeted for
a month:
Fuel
$2,120,000
Ground personnel
788,500
Crew salaries
850,000
Depreciation
430,000
Total costs
$4,188,500
Blue Star management wishes to assign these costs to individual
flights in order to gauge the profitability of...
In performing short-term CVP analysis for a new product or service, the decision-maker would: Group of...
In performing short-term
CVP analysis for a new product or service, the decision-maker
would:
Group of answer choices
Include only allocated fixed costs.
Include only current fixed costs.
Include all current and future fixed costs.
Include only incremental fixed costs.
Include only future fixed costs.
PreviousNext
A medical researcher wants to determine if the average hospital stay after a certain procedure is...
A medical researcher wants to determine if the average hospital
stay after a certain procedure is less than 11.87 days. The
hypotheses for this scenario are as follows: Null Hypothesis: μ ≥
11.87, Alternative Hypothesis: μ < 11.87. If the researcher
randomly samples 25 patients that underwent the procedure and
determines their average hospital stay was 10.6 days with a
standard deviation of 6.724 days, what is the test statistic and
p-value of this test?
Question 10 options:
1)
Test...
Review a current product or service in the market and determine if the company identified the...
Review a current product or service in the market and determine
if the company identified the persona for its product effectively.
What decisions created a successful or unsuccessful product
persona?
Balco Inc. uses ABC costing to determine product costs for reporting. At the start of the...
Balco Inc. uses ABC costing to determine product costs for
reporting. At the start of the year,
management made the following cost and activity estimates for the
company's 4 activity costs pools.
Activity/Cost Pool
Activity
Measure
Estimated
Overhead Cost
Expected
Activity
Labour Related
DLH
$184,925
28,460 DLH
Purchase Orders
# of orders
$52,700
625 Orders
Widget Assembly
# of widgets
$495,000
11,100 widgets
General Factory
Machine Hours
$1,148,000
82,500 MH
Required: Compute the Activity Rate (pre-determined OH Rate) for
all...
Dodo Inc., uses activity-based costing to determine product margins. In the first stage, the activity-based costing...
Dodo Inc., uses activity-based costing to determine product
margins. In the first stage, the activity-based costing system
allocates two overhead accounts--equipment depreciation and
supervisory expense--to three activity cost pools--Machining, Order
Filling, and Other--based on resource consumption. Data pertinnent
to perform these allocations appears below:
Overhead costs:
Equipment depreciation
$
107,000
Supervisory expense
$
9,900
Distribution of Resource Consumption Across Activity Cost
Pools:
Activity Cost Pools
Machining
Order Filling
Other
Equipment depreciation
0.60
0.30
0.10
Supervisory expense
0.60
0.20
0.20
In...
Plasiderm, Inc., sells a medical product. The company is currently selling the product for $18/unit and...
Plasiderm, Inc., sells a medical product. The company is
currently selling the product for $18/unit and is considering
whether it could increase profits by increasing the product’s price
to $20/unit. Plasiderm currently sells 50,000 units per week. Its
current weekly operating data are as follows: Sales revenue
$900,000 Variable costs $400,000 Fixed costs $250,000 Pretax profit
$250,000 You can assume that per-unit variable costs do not vary
with the level of production.
(a) What is the breakeven sales level for...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- ***Convert the C++ to Python*** #include <iostream> using std::cout; using std::cin; using std::endl; int charClass; char...
- Make-or-Buy Decision Fremont Computer Company has been purchasing carrying cases for its portable computers at a...
- The following costs were incurred for the single product produced during the first year of operations...
- Non-constant growth model: Do=$2.00 required return on equity= 5% g= 9% n=1,2 g=7% n=3,4 g=3% n=5...
- . Find all x ∈ Z143 such that x2Ξ 7 (mod 143). Please explain all steps...
- #Python: A palindrome is a sequence of characters that reads the same backwards as forwards. For...
- Explain an example in which a variable has two different addresses at different places in a...
ADVERTISEMENT