Answered step by step
Verified Expert Solution
Question
1 Approved Answer
3 Exercise 17-18 Activity-based costing LO P3 1.66 points Surgery Center is an outpatient surgical clinic that was profitable for many years, but Medicare has
3 Exercise 17-18 Activity-based costing LO P3 1.66 points Surgery Center is an outpatient surgical clinic that was profitable for many years, but Medicare has cut its reimbursements by as much as 30%. As a result, the clinic wants to better understand its costs. It decides to prepare an activity-based cost analysis, including an estimate of the average cost of both general surgery and orthopedic surgery. The clinic's three activity cost pools and their cost drivers follow. 04:05:58 Activity Cost Pool Professional salaries Patient services and supplies Building cost Cost Cost Driver $1,683,000 Professional hours 28,520 Number of patients 159,600 square feet Driver Quantity 10, 200 620 1,520 eBook The two main surgical units and their related data follow. Hint Service General surgery Orthopedic surgery Hours 2,600 7,600 Square Feet* 610 910 Patients 410 210 Print * Orthopedic surgery requires more space for patients, supplies, and equipment. References Required: 1. & 2. Compute the cost per cost driver for each of the three activity cost pools. Use the results to allocate costs to both the general surgery and the orthopedic surgery units. Compute total cost and average cost per patient for both the general surgery and the orthopedic surgery units. (Round your final answers to whole dollar.) General Surgery Activity driver Overhead incurred assigned Orthopedic Surgery Activity driver Overhead assigned incurred Activity Overhead Cost Activity Drivers Activity Rate Professional salaries Patient services and supplies Building cost Professional hours Number of patients Square feet
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started