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7.7 Consider the following data for a clinical laboratory: Activity Data Test A Test B Test C Test D 2,000 1,500 1,000 500 5 10
7.7 Consider the following data for a clinical laboratory: Activity Data Test A Test B Test C Test D 2,000 1,500 1,000 500 5 10 10 Activity Receive specimen Set up equipment Run test Record results Transmit results Total costs Annual Costs Cost Driver $10,000 Number of tests 25,000 Number of minutes per test 100,000 Number of minutes per test 10,000 Number of minutes per test 5,000 Number of minutes per test $150,000 a. Using ABC techniques, determine the allocation rate for each activity. b. Now, using this allocation rate, estimate the total cost of performing each test. c. Verify that the total annual costs aggregated from individual test costs equal the total annual costs of the laboratory given in the table above
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