74 November 2011 PRACTICE MANAGEMENT: OPPORTUNITIES AND CHALLENGES 949.1 Supplementary Table 1. Cost Drivers Annual quantity of cost driver Cost allocation rate Actual quantity of allocation base Allocated activity cos 11,000 120,000 90,000 $7.69 $0.33 $0.58 1 30 20 $7.69 $10.00 $11.67 120,000 11,000 11,000 11,000 11,000 $0.58 $0.43 $5.00 $0.32 $40.00 30 1 1 1 1 $18.00 $0.43 $5.00 $0.32 $40.00 Annual Component activity Category cost Cost driver Referral and scheduling Scheduling pod Indirect labor $84,588 Number of patients Office secretary Direct labor $40,000 Minutes used Patient education Direct labor $52,500 Minutes used preprocedure Day of procedure processing Patient registration-RN Direct labor $70,000 Minutes used IV Insertions Direct material $4730 Number of patients IV tubing Direct material $55,000 Number of patients Nascannula Direct material $3520 Number of patients ECG leads Direct material $440,000 Number of patients Procedure Nurse Direct labor $70,000 Minutes used Technician Direct labor $33,000 Minutes used Medication demers Direct material $9350 Number of patients Medications-versed Direct material $20.350 Number of patients Medical malpractice Indirect cost $259,816 Number of patients Equipment depreciation Indirect cost $323.820 Number of patients Gi laboratory depreciation Indirect cost $323.820 Number of patients Laboratory Supervisor Direct labor $100,000 Number of patients Hospital overhead Indirect cost $650,524 Number of patients Ancillary equipment Indirect material $382.280 Number of patients Recovery Food services Indirect labor $130.808 Number of patients Nurse Direct labor $70.000 Minutes used Scope cleaning Technician Direct labor $33.000 Minutes used Materials Indirect material $13.146 Number of patients Overhead costs Biling Indirect labor $200,504 Number of patients ECG, electrocardiogo IV, intravenous: RN, rostredie 120,000 120,000 11,000 11.000 11,000 11.000 11,000 11000 11,000 11,000 11.000 120,000 $0.58 $0.28 $0.85 $1.88 $23.62 $29.44 $29.44 $9.09 $59.14 $34.75 45 30 1 1 1 1 1 1 1 1 $26.25 $8.25 $0.85 $1.85 $23.62 $29.44 $29.44 $9.09 $59.14 $34.75 $11. $0.58 $11.89 $5.83 120,000 11,000 50.28 $1.20 -99--- $5.50 $1.20 11.000 $18.23 $18.23 MacBook Req 1: Northshore used Activity-Based Costing to determine the costs associated with a Gl procedure. Using this information, summarize the total costs of the department using Supplementary Table 1. (5 points) Direct Materials Direct Labor Indirect Materials Indirect Labor Indirect Cost Total Cost $3,370,756 Req 2: What are the total indirect costs that Northshore needed to allocate to the procedure? (3 points) Indirect Materials Indirect Labor Indirect Cost Total Cost MacBook Air DO Req. 5: Based upon what we have learned in Chapter 7, do you think there is any benefit to allocating these costs to the procedure? Do you think the analysis of costs would be different if these indirect costs were not allocated? Why, why not? (4 points) System Req 1: Northshore used Activity-Based Costing to determine the costs associated wit a Gl procedure. Using this information, summarize the total costs of the department using Supplementary Table 1. (5 points) Direct Materials Direct Labor Indirect Materials Indirect Labor Indirect Cost Total Cost $3,370,756 Req 2: What are the total indirect costs that Northshore needed to allocate to the procedure? (3 points) Indirect Materials Indirect Labor Indirect Cost Total Cost English (United States) Req. 5: Based upon what we have learned in Chapter 7, do you think there is any benefit to allocating these costs to the procedure? Do you think the analysis of costs would be different if these indirect costs were not allocated? Why, why not? (4 points) I Paused Supplementary Table 1. Cost Drivers Annual quantity of cost driver Cost allocation rate Actus quantity of allocation base Allocated activity cost 11.000 120.000 90.000 $7.09 $0.33 $0.58 1 30 20 $7.69 $10.00 $11.67 1 120.000 11.000 11,000 11.000 11.000 $0.58 $0.43 $5.00 50.32 $40.00 $18.00 $0.43 $5.00 $0.32 $40.00 1 Annual Component activity Category COST Cost driver Referral and scheduling Scheduling pod Indirect labor 584 KB Number of patients Office secretary Direct labor $40,000 Minutes used Patient education Direct labor $52.500 Minutes used preprocedure Day of procedure processing Patient registration-RN Director $70,000 Minutes wed IV Insertions Direct material 54730 Number of patients TV tubing Direct maten $55,000 Number of patients Nasal cannula Direct material $3520 Number of patients ECG leads Direct material $440,000 Number of patients Procedure Nurse Direct labor $70,000 Moutes used Technician Direct labor $33,000 Minutes used Medication demeral Direct material $9350 Number of patients Medications versed Direct material $20.350 Number of patients Medical malpractice Indirect cost $250 816 Number of patients Equipment depreciation Indirect cost $323,820 Number of patients Gi laboratory depreciation Indirect cost $323,820 Number of patients Laboratory supervisor Direct labor $100,000 Number of patients Hospital overhead Indirect cost $650,524 Number of patients Ancillary equipment Indirect material $382.280 Number of patients Recovery Food services Indirect labor $130,808 Number of patients Nurse Direct labor $70,000 Minutes used Scope cleaning Technician Direct labor $33,000 Minutes used Materials Indirect material $13.146 Number of patients Overhead costs Billing Indirect labor $200.504 Number of pants ECG, electrocardiogram; IV, intravenous: RN, registered nurse 120.000 120.000 11.000 11.000 11,000 11,000 11.000 11,000 11.000 11.000 $0.58 $0.28 S0.85 $1.85 $23.62 $29.44 $29.44 $9.00 $59.14 $34.75 45 30 1 1 1 1 1 1 1 1 $26.25 $8.25 $0.85 $1.85 $23.62 $29.44 $29.44 $9.09 $59.14 $34.75 11,000 120.000 $11.19 30.58 1 10 $11.89 $5.83 120,000 11,000 $0.28 $1.20 20 1 $5.50 $1.20 11,000 $18.23 1 $18.23 74 November 2011 PRACTICE MANAGEMENT: OPPORTUNITIES AND CHALLENGES 949.1 Supplementary Table 1. Cost Drivers Annual quantity of cost driver Cost allocation rate Actual quantity of allocation base Allocated activity cos 11,000 120,000 90,000 $7.69 $0.33 $0.58 1 30 20 $7.69 $10.00 $11.67 120,000 11,000 11,000 11,000 11,000 $0.58 $0.43 $5.00 $0.32 $40.00 30 1 1 1 1 $18.00 $0.43 $5.00 $0.32 $40.00 Annual Component activity Category cost Cost driver Referral and scheduling Scheduling pod Indirect labor $84,588 Number of patients Office secretary Direct labor $40,000 Minutes used Patient education Direct labor $52,500 Minutes used preprocedure Day of procedure processing Patient registration-RN Direct labor $70,000 Minutes used IV Insertions Direct material $4730 Number of patients IV tubing Direct material $55,000 Number of patients Nascannula Direct material $3520 Number of patients ECG leads Direct material $440,000 Number of patients Procedure Nurse Direct labor $70,000 Minutes used Technician Direct labor $33,000 Minutes used Medication demers Direct material $9350 Number of patients Medications-versed Direct material $20.350 Number of patients Medical malpractice Indirect cost $259,816 Number of patients Equipment depreciation Indirect cost $323.820 Number of patients Gi laboratory depreciation Indirect cost $323.820 Number of patients Laboratory Supervisor Direct labor $100,000 Number of patients Hospital overhead Indirect cost $650,524 Number of patients Ancillary equipment Indirect material $382.280 Number of patients Recovery Food services Indirect labor $130.808 Number of patients Nurse Direct labor $70.000 Minutes used Scope cleaning Technician Direct labor $33.000 Minutes used Materials Indirect material $13.146 Number of patients Overhead costs Biling Indirect labor $200,504 Number of patients ECG, electrocardiogo IV, intravenous: RN, rostredie 120,000 120,000 11,000 11.000 11,000 11.000 11,000 11000 11,000 11,000 11.000 120,000 $0.58 $0.28 $0.85 $1.88 $23.62 $29.44 $29.44 $9.09 $59.14 $34.75 45 30 1 1 1 1 1 1 1 1 $26.25 $8.25 $0.85 $1.85 $23.62 $29.44 $29.44 $9.09 $59.14 $34.75 $11. $0.58 $11.89 $5.83 120,000 11,000 50.28 $1.20 -99--- $5.50 $1.20 11.000 $18.23 $18.23 MacBook Req 1: Northshore used Activity-Based Costing to determine the costs associated with a Gl procedure. Using this information, summarize the total costs of the department using Supplementary Table 1. (5 points) Direct Materials Direct Labor Indirect Materials Indirect Labor Indirect Cost Total Cost $3,370,756 Req 2: What are the total indirect costs that Northshore needed to allocate to the procedure? (3 points) Indirect Materials Indirect Labor Indirect Cost Total Cost MacBook Air DO Req. 5: Based upon what we have learned in Chapter 7, do you think there is any benefit to allocating these costs to the procedure? Do you think the analysis of costs would be different if these indirect costs were not allocated? Why, why not? (4 points) System Req 1: Northshore used Activity-Based Costing to determine the costs associated wit a Gl procedure. Using this information, summarize the total costs of the department using Supplementary Table 1. (5 points) Direct Materials Direct Labor Indirect Materials Indirect Labor Indirect Cost Total Cost $3,370,756 Req 2: What are the total indirect costs that Northshore needed to allocate to the procedure? (3 points) Indirect Materials Indirect Labor Indirect Cost Total Cost English (United States) Req. 5: Based upon what we have learned in Chapter 7, do you think there is any benefit to allocating these costs to the procedure? Do you think the analysis of costs would be different if these indirect costs were not allocated? Why, why not? (4 points) I Paused Supplementary Table 1. Cost Drivers Annual quantity of cost driver Cost allocation rate Actus quantity of allocation base Allocated activity cost 11.000 120.000 90.000 $7.09 $0.33 $0.58 1 30 20 $7.69 $10.00 $11.67 1 120.000 11.000 11,000 11.000 11.000 $0.58 $0.43 $5.00 50.32 $40.00 $18.00 $0.43 $5.00 $0.32 $40.00 1 Annual Component activity Category COST Cost driver Referral and scheduling Scheduling pod Indirect labor 584 KB Number of patients Office secretary Direct labor $40,000 Minutes used Patient education Direct labor $52.500 Minutes used preprocedure Day of procedure processing Patient registration-RN Director $70,000 Minutes wed IV Insertions Direct material 54730 Number of patients TV tubing Direct maten $55,000 Number of patients Nasal cannula Direct material $3520 Number of patients ECG leads Direct material $440,000 Number of patients Procedure Nurse Direct labor $70,000 Moutes used Technician Direct labor $33,000 Minutes used Medication demeral Direct material $9350 Number of patients Medications versed Direct material $20.350 Number of patients Medical malpractice Indirect cost $250 816 Number of patients Equipment depreciation Indirect cost $323,820 Number of patients Gi laboratory depreciation Indirect cost $323,820 Number of patients Laboratory supervisor Direct labor $100,000 Number of patients Hospital overhead Indirect cost $650,524 Number of patients Ancillary equipment Indirect material $382.280 Number of patients Recovery Food services Indirect labor $130,808 Number of patients Nurse Direct labor $70,000 Minutes used Scope cleaning Technician Direct labor $33,000 Minutes used Materials Indirect material $13.146 Number of patients Overhead costs Billing Indirect labor $200.504 Number of pants ECG, electrocardiogram; IV, intravenous: RN, registered nurse 120.000 120.000 11.000 11.000 11,000 11,000 11.000 11,000 11.000 11.000 $0.58 $0.28 S0.85 $1.85 $23.62 $29.44 $29.44 $9.00 $59.14 $34.75 45 30 1 1 1 1 1 1 1 1 $26.25 $8.25 $0.85 $1.85 $23.62 $29.44 $29.44 $9.09 $59.14 $34.75 11,000 120.000 $11.19 30.58 1 10 $11.89 $5.83 120,000 11,000 $0.28 $1.20 20 1 $5.50 $1.20 11,000 $18.23 1 $18.23