Consider the following data for a primary care practice that provides two types of services, A and B:

a. Using ABC techniques, determine the allocation rate for each overhead activity.

b. Determine the overhead costs per visit for each type of service.

c. Verify that the total annual costs aggregated from individual visit costs equal the total annual costs of the practice given in the table above.

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Activity Annual Costs Cost Driver Service A Activity Data Service B Check-in $ 100,000 Visit volume 7,000 15,000 Assessment 250,000 Minutes per service 15 8 Diagnosis 600,000 Minutes per service 20 10 Treatment 1,200,000 Minutes per service 5 5 Check-out 125,000 Visit volume 7,000 Billing 250,000 Number of bills 3 15,000 1 Total $2,525,000