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Activity-Based Budgeting St. Sophias Hospital is preparing its budget for the coming year. It uses an activity-based approach for all costs except physician care. Its

Activity-Based Budgeting St. Sophias Hospital is preparing its budget for the coming year. It uses an activity-based approach for all costs except physician care. Its emergency room has three activity areas with cost drivers as follows: 1. Receptionpaperwork of incoming patients. Cost driver is the number of forms completed. 2. Treatmentinitial diagnosis and treatment of patients. Cost driver is the number of diagnoses treated. 3. Cleaninggeneral cleaning plus preparing treatment facilities for next patient. Cost driver is the number of people visiting emergency room (patients plus person(s) accompanying them).

Budgeted Amount of Cost Driver
Activiy Area Cost Driver Rates Outpatients Admitted Patients
Reception $ 60 8,400 forms 6,500 forms
Treatment 120 8,000 diagnoses 5,400 diagnoses
Cleaning 21 7,400 people 3,400 people

a. Prepare the total budgeted cost for each activity.

Activity Cost Budget
Reception Treatment Cleaning
Outpatients Answer Answer Answer
Admitted Patients Answer Answer Answer
Total Answer Answer Answer

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