Suppose that a surgical ward has gathered the following information for four nursing activities and two types of patients for the current period:

Required:
1. Determine the total nursing costs assigned to each patient category.
2. Output is measured in patient days. Assuming that the normal patient category uses 8,000 patient days and the intensive patient category uses 6,400 patient days, calculate the nursing cost per patient day for each type of patient. (Round to two decimal places.)
3. The supervisor of the surgical ward has suggested that patient days is the only driver needed to assign nursing costs to each type of patient. Calculate the charge per patient day (rounded to the nearest cent) using this approach and then explain to the supervisor why this would be a bad decision.
4. Refer to the four data analytic types in Exhibit 2-2 on p. 39. Describe which data analytic types apply for Requirements one through three (more than one type may apply).
5. Assume that the accounting department is preparing a budget for the coming year. The activity rate for each activity is expected to increase by 10%, but the quantity of the activity drivers and patient days is expected to remain the same as the current period. 

a. Using ABC, repeat Requirements 1 and 2, and describe the data analytic type(s) being used.
b. Describe how Excel simplifies this calculation, including examples of equations that would be used.

Transcribed Image Text:

Treating patients Providing hygienic care Responding to requests Monitoring patients Driver Treatments Hygienic hours Requests Monitoring hours Patient Category Normal Intensive 6,400 8,000 4,800 17,600 32,000 80,000 6,000 72,000 Activity Rate $4.00 5.00 2.00 3.00