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Activity - based costing for a service company Crosswinds Hospital plans to use activity - based costing to assign hospital indirect costs to the care
Activitybased costing for a service company
Crosswinds Hospital plans to use activitybased 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:
tableActivityActivity RateRoom and meals,$ per dayRadiology$ per imagePharmacy$ per physician orderChemistry lab,$ per testOperating room,$ per operating room hour
The activity usage information associated with the two patients is as follows:
tableAbel Putin,Cheryl UmitNumber of days, days, daysNumber of images, images, imagesNumber of physician orders, orders, ordersNumber of tests, tests, testsNumber of operating room hours, hours, hours
a Determine the activity cost associated with each patient.
Abel Putin $
Cheryl Umit $
b 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.
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