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

Activity		Activity Rate
Room and meals	$260		per day
Radiology	$210		per image
Pharmacy	$30		per physician order
Chemistry lab	$110		per test
Operating room	$940		per operating room hour

The activity usage information associated with the two patients is as follows:

	Abel Putin		Cheryl Umit
Number of days	8	days	4	days
Number of images	6	images	5	images
Number of physician orders	6	orders	2	orders
Number of tests	7	tests	4	tests
Number of operating room hours	5	hours	3	hours

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

Determine the activity cost associated with each patient.

Abel Putin $

Cheryl Umit $
Why is the total activity cost different for the two patients?

apparently had a different condition that required more extensive treatment. Thus, the activity cost to is more than the activity cost of the other patient.

Solutions

Expert Solution

Activity Based Costing

Answer

1	Activity Cost Associated with
	Activity	Activity Driver	Rate (A)	Abel Putin ($)		Cheril Umit ($)
	Activity	Activity Driver	Rate (A)	(a)	*Cost (Aa)**	(b)	*Cost (Ab)**
	Room and Maeals	Per day	260	8	2080	4	1040
	Radiology	Per Image	210	6	1260	5	1050
	Pharmacy	Per physician Order	30	6	180	2	60
	Chemistry Lab	Per Tests	110	7	770	4	440
	Operating Room	Per operating room Hour	940	5	4700	3	2820
	Total Allocated Cost as per Activity based costing				8990		5410

2	Why Cost is different for both patients.?

	Cost drivers for each patients are different so that, the total cost will be different

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

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:...

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 $252 per day Radiology $355 per image Pharmacy $56 per physician order Chemistry lab $100 per test Operating room $680 per operating room hour The activity usage information associated with the two patients is as follows:...

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 $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:...

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 $240 per day Radiology $215 per image Pharmacy $50 per physician order Chemistry lab $80 per test Operating room $1,000 per operating room hour The activity usage information associated with the two patients is as follows:...

Crosswinds Hospital plans to use activity-based costing to assign hospital indirect costs to the care of...

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 $218 per day Radiology $196 per image Pharmacy $52 per physician order Chemistry lab $73 per test Operating room $971 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of...

1. Crosswinds Hospital plans to use activity-based costing to assign hospital indirect costs to the care...

1. 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 $260 per day Radiology $367 per image Pharmacy $39 per physician order Chemistry lab $105 per test Operating room $920 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number...

Lysiak Corporation uses an activity based costing system to assign overhead costs to products. In the...

Lysiak Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs--equipment depreciation and supervisory expense-are allocated to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below: Overhead costs: Equipment depreciation $ 47,000 Supervisory expense $ 6,000 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Other Equipment depreciation 0.60 0.10 0.30 Supervisory expense 0.60 0.20 0.20...

Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to...

Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products:Information is given as Activity Cost Pool; Amount; Activity RateSetting up batches; $59.06; per batchProcessing customer orders; $72.66; per customer orderAssembling products; $3.75; per assembly hourData concerning the two products is below:Product K91B:Number of batches = 84; number of customer orders = 32; number of assembly hours = 483Product F650:Number of batches = 50; number of customer orders = 43; number of assembly hours...

Hane Corporation uses the following activity rates from its activity-based costing to assign overhead costs to...

Hane Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity Cost Pools Activity Rate Assembling products $8.90 per assembly hour Processing customer orders $31.23 per customer order Setting up batches $43.72 per batch Data for one of the company's products follow: Product U94W Number of assembly hours 389 Number of customer orders 53 Number of batches 61 How much overhead cost would be assigned to Product U94W using the activity-based costing system?

Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to...

Gould Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity Cost Pool Activity Rate Setting up batches $ 59.31 per batch Processing customer orders $ 72.81 per customer order Assembling products $ 4.00 per assembly hour Data concerning two products appear below: Product K91B Product F65O Number of batches 84 55 Number of customer orders 34 48 Number of assembly hours 488 895 How much overhead cost would be assigned to Product...

Subjects