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Activity-Based Costing for a Service Company Crosswinds Hospital plans to use activity-based costing to assign hospital...

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 $210 per day
Radiology $296 per image
Pharmacy $45 per physician order
Chemistry lab $77 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 7 orders 9 orders
Number of tests 3 tests 6 tests
Number of operating room hours 3.5 hours 5.5 hours

a. Determine the activity cost associated with each patient.

Abel Putin $
Cheryl Umit $

Solutions

Expert Solution

Activity cost associated with patient Abel Putin

Activity

Activity base

usage (1)

Activity

Rate (2)

Total cost (1)*(2)

per actvity
Rooms and meals 3 days 210 per day 630
Radiology 4 images 296 per image 1184
Pharmacy 7 orders 45 per order 315
Chemistry Lab 3 test 77 per test 231
Operating Room 3.5 hours 740 per hour 2590
TOTAL ACTIVITY COST = $ 4950

Activity cost associated with patient Cheril Umit Putin

Activity

Activity base

usage (1)

Activity

Rate (2)

Total cost (1)*(2)

per actvity
Rooms and meals 11 days 210 per day 2310
Radiology 5 images 296 per image 1480
Pharmacy 9 orders 45 per order 405
Chemistry Lab 6 test 77 per test 462
Operating Room 5.5 hours 740 per hour 4070
TOTAL ACTIVITY COST = $ 8727

ekkarill92 answered 2 years ago
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