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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 of days 2 days 8 days
Number of images 5 images 5 images
Number of physician orders 5 orders 7 orders
Number of tests 2 tests 5 tests
Number of operating room hours 4 hours 6.5 hours

a. Determine the activity cost associated with each patient.

Abel Putin $
Cheryl Umit $

2. Hercules Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows:

Activity Activity Rate
Fabrication $23 per machine hour
Assembly $12 per direct labor hour
Setup $58 per setup
Inspecting $27 per inspection
Production scheduling $13 per production order
Purchasing $10 per purchase order

The activity-base usage quantities and units produced for each product were as follows:

Activity Base Elliptical Machines Treadmill
Machine hours 1,872 1,104
Direct labor hours 500 195
Setups 57 18
Inspections 668 401
Production orders 68 14
Purchase orders 188 115
Units produced 287 192

Use the activity rate and usage information to determine the total activity cost and activity cost per unit for each product. If required, round the per unit answers to the nearest cent.

Total Activity Cost Activity Cost Per Unit
Elliptical Machines $ $
Treadmill $ $

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ekkarill92 answered 1 year ago
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