5-39 ABC, health care. Crosstown Health Center runs two programs: drug addict rehabilitation and after- care (counseling and support of patients after release from a mental hospital). The center's budget for 2017 follows. Professional salaries: 4 physicians X $150,000 $600,000 12 psychologists X $75,000 900,000 16 nurses X $30,000 480,000 $1,980,000 Medical supplies 242,000 Rent and clinic maintenance 138,600 Administrative costs to manage patient charts, food, laundry 484,000 Laboratory services 92,400 Total $2,937,000 Kim Yu, the director of the center, is keen on determining the cost of each program. Yu compiles the follow- ing data describing employee allocations to individual programs: Drug Aftercare Total Employees Physicians Psychologists Nurses Yu has recently become aware of activity-based costing as a method to refine costing systems. She asks her accountant, Gus Gates, how she should apply this technique. Gates obtains the following budgeted information for 2017: Drug 9,000 Aftercare 12,000 Total 21,000 Square feet of space occupied by each program Patient-years of service Number of laboratory tests 60 110 1,400 700 2,100 1. a. Selecting cost-allocation bases that you believe are the most appropriate for allocating indirect costs to programs, calculate the budgeted indirect cost rates for medical supplies; rent and clinic maintenance; administrative costs for patient charts, food, and laundry, and laboratory services. b. Using an activity-based costing approach to cost analysis, calculate the budgeted cost of each program and the budgeted cost per patient-year of the drug program. c. What benefits can Crosstown Health Center obtain by implementing the ABC system? 2. What factors, other than cost, do you think Crosstown Health Center should consider in allocating resources to its programs