A B C D E A hospital pharmacy fills three types of prescriptions. Prescription A is a narcotic and therefore requires locked storage. Prescription B has potentially fatal interactions with other drugs and therefore requires careful review by a pharmacist. Prescription C is a basic, common drug that presents little risk to the patient. Table1 below shows budgeted direct material and direct labor data for the three prescriptions. Table 2 shows budgeted overhead costs. Table 3 shows budgeted production data for filling each prescription. 6 TABLE 1. Direct Materials and Direct Labor Budget Prescription A Prescription B Prescription C # of pills per prescription 7 25 100 9 Cost per pill 150.00 $ 10.00 $ 0.25 Average pharmacy technician time to fill prescription (minutes per 10 prescription) 15 10 8 Pharmacy technician cost 11 per minute $ 0.42 5 0.42 $ 0.42 12 13 TABLE 2. Budgeted Overhead Costs 14 Cost Driver Total Budgeted Activity Budgeted Cost Securely storing # of pills requiring locked 15 medication storage 7 $ 2,100 # of feet (distance) to drug 16 Materials handling storage area 90 $ 1,200 17 Reviewing prescription Pharmacist minutes 28 $ 5,000 18 Total overhead $ 8,300 19 20 TABLE 3. Budgeted Production Data 21 Cost Driver Prescription A Prescription B Prescription C # of pills requiring locked 22 storage 7 0 0 # of feet (distance) to drug 23 storage area 60 20 10 24 Pharmacist minutes 7 20 25A B C D E F G H K L M N O P 25 Using the data in the tables above, answer the following three questions. Make sure to show your calculations with formulas in cells. You may add rows or columns to the worksheet, and/or perform 26 calculations anywhere on the worksheet. Just be sure to mark and label them so we can find them. 27 28 29 a. Assuming the hospital uses a traditional costing system where all overhead costs are allocated on the basis of direct materials cost, compute the full cost of each prescription. 30 31 Prescription A Prescription B Prescription C 32 Direct Materials $ 1,050.00 S 250.00 $ 25.00 33 Direct Labor 6.30 $ 4.20 $ 3.36 34 Overhead 4.150 $ 3,838 $ 312 35 Full Cost S 5,206.30 $ 4,092.30 | $ 340.26 36 37 38 39 b. Assuming the hospital uses an activity-based costing system where overhead costs are split into three different cost pools as shown in Table 2, compute the full cost of each prescription. 40 41 Prescription A Prescription B Prescription C 42 Direct Materials 43 Direct Labor 44 Secure storage 45 Materials handling 46 Review of prescription 47 Full Cost 48 49 50 c. What accounts for the differences in costs between part a. and part b.? 51