Adamac Clinic is a specialist healthcare provider which operates in Lagos, Nigeria. Output is defined as patient days. The clinic uses ABC in its accounting system and provides the following three services to patients. Note all costs are presented using the currency of Nigeria i.e., Nigerian Naira (₦):
a. Daily care which include medical treatment and admission
b. Accommodation and feeding
c. After medical care
During the last financial year, the following details were captured in the books of the clinic:

hours 82,000 The clinic had four main specialist areas which were recorded as follows:

Required

1. Compute the rate for each activity pool of the clinic.
2. Compute the daily rate for each of the medical problems.
3. During the first quarter of last year, the clinic recorded the following number of patients:

Compute the cost of providing medical care to patients using ABC method.
4. Comment in the application of ABC in the medical industry

Transcribed Image Text:

Activity Daily care Accommodation and feeding After medical care Annual Cost (#) Cost Driver 2,100,000 Nursing days 4,500,000 Patient days 1,500,000 Consultation hours Days/Hours 10,000 45,000 82,000