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:

Resident Annual Annual Number of Assistance

Classification Resident Days Assistance Hours Contacts

A $18,0009,10027,000$

B $10,00022,50031,000$

C $5,50023,00027,500$

D $3,00018,40024,000$

$36,50073,000109,500$

Other data

Total cost of medical services for the period $$10,840,500$

Total cost of meals and residential space $$5,701,300$

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

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

$Answer $1$

$0$

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.

Class A Class B Class C Class D

ABC Cost of a resident day Answer $2$

$0$

Answer $3$

$0$

Answer $4$

$0$

Answer $5$

$0$

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.

Class A Class B Class C Class D

ABC Cost of a resident day Answer $6$

$0$

Answer $7$

$0$

Answer $8$

$0$

Answer $9$

$0$

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

Answer $10$

Please answer all parts of the question.