In: Accounting
ABC-A Service Application
Grand Haven is a senior living community that offers a full range
of services including independent living, assisted living, and
skilled nursing care. The assisted living division provides
residential space, meals, and medical services (MS) to its
residents. The current costing system adds the cost of all of these
services (space, meals, and MS) and divides by total resident days
to get a cost per resident day for each month. Recognizing that MS
tends to vary significantly among the residents, Grand Haven's
accountant recommended that an ABC system be designed to calculate
more accurately the cost of MS provided to residents. She decided
that residents should be classified into four categories (A, B, C,
D) based on the level of services received, with group A
representing the lowest level of service and D representing the
highest level of service. Two cost drivers being considered for
measuring MS costs are number of assistance calls and number of
assistant contacts. A contact is registered each time an assistance
professional provides medical services or aid to a resident. The
accountant has gathered the following data for the most recent
annual period:
Resident Classification |
Annual Resident Days |
Annual Assistance Hours | Number of Assistance Contacts |
---|---|---|---|
A |
8,760 | 15,000 | 60,000 |
B |
6,570 | 20,000 | 52,000 |
C |
4,380 | 22,500 | 52,000 |
D |
2,190 | 32,500 | 52,000 |
21,900 | 90,000 | 216,000 |
Other data: | |
---|---|
Total cost of medical services for the period | $5,000,000 |
Total cost of meals and residential space | $3,280,000 |
a. Determine the ABC cost of a resident day for each category of residents using assistance hours as the cost driver.
Round answer below to the nearest
dollar.
Medical services cost per assistance hour $Answer
NOTE: Use your rounded answer
above to compute the answers below. Round your final answers to the
nearest dollar.
Per Day Costs | |||
---|---|---|---|
Medical Services | Meals and Residential | Total | |
Class A | Answer | Answer | Answer |
Class B | Answer | Answer | Answer |
Class C | Answer | Answer | Answer |
Class D | Answer | Answer | Answer |
b. Determine the ABC cost of a resident day for each category of residents using assistance contacts as the cost driver.
Round answer below to the nearest
dollar.
Medical services cost per assistance contacts $Answer
NOTE: Use your rounded answer above to compute the answers below. Round your final answers to the nearest dollar.
Per Day Costs | |||
---|---|---|---|
Medical Services | Meals and Residential | Total | |
Class A | Answer | Answer | Answer |
Class B | Answer | Answer | Answer |
Class C | Answer | Answer | Answer |
Class D | Answer | Answer | Answer |
Show work plz