Activity$-$based costing for a service company

Crosswinds Hospital plans to use activity$-$based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs:

Activity Activity Rate

Room and meals $$280$ per day

Radiology $$215$ per image

Pharmacy $$50$ per physician order

Chemistry lab $$80$ per test

Operating room $$770$ per operating room hour

The activity usage information associated with the two patients is as follows:

Abel Putin Cheryl Umit

Number of days $9$ days $2$ days

Number of images $6$ images $5$ images

Number of physician orders $8$ orders $4$ orders

Number of tests $5$ tests $2$ tests

Number of operating room hours $7$ hours $5$ hours

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

Determine the activity cost associated with each patient.

Abel Putin $fill in the blank $2$

Cheryl Umit $fill in the blank $3$

Why is the total activity cost different for the two patients?

apparently had a different condition that required more extensive treatment. Thus, the activity cost to

is more than the activity cost of the other patient.