ABC$-$A Service Application

Grand Haven is a senior living community that offers a full range of services including independent living, assisted living, and skilled nursing care. The

assisted living division provides residential space, meals, and medical services $($MS$)$ to its residents. The current costing system adds the cost of all of

these services $($space$,$ meals, and MS$)$ and divides by total resident days to get a cost per resident day. Recognizing that MS tends to vary significantly

among the residents, Grand Haven's accountant recommended that an ABC system be designed to calculate more accurately the cost of MS provided to

residents. She decided that residents should be classified into four categories $($A$,$ B$,$ C$,$ D$)$ based on the level of services received, with group A

representing the lowest level of service and D representing the highest level of service. Two cost drivers being considered for measuring MS costs are

number of assistance calls and number of assistant contacts. A contact is registered each time an assistance professional provides medical services or

aid to a resident. The accountant has gathered the following data for the most recent annual period:

Required $($round answers to the nearest dollar$)$:

a$.$ Determine the total cost of a resident day using the current system.

$

per day

b$.$ Determine the ABC cost of a resident day for each category of residents using assistance hours as the cost driver for medical services and resident

days as the cost driver for meals and residential space.

Note: Round your answers to two decimal places.

c$.$ Determine the ABC cost of a resident day for each category of residents using assistance contacts as the cost driver for medical services and resident

days as the cost driver for meals and residential space.

Note: Round your answers to two decimal places.

d$.$ Which cost drivers provide the more accurate measure of the cost per day for a Grand Haven resident?

Please answer all parts of the question.