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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Expert Solution

ekkarill92 answered 10 months ago

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