1. 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	$200	per day
   Radiology	$282	per image
   Pharmacy	$41	per physician order
   Chemistry lab	$75	per test
   Operating room	$680	per operating room hour

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

   	Abel Putin		Cheryl Umit
   Number of days	2	days	11	days
   Number of images	4	images	8	images
   Number of physician orders	5	orders	7	orders
   Number of tests	2	tests	5	tests
   Number of operating room hours	4.5	hours	6.5	hours

   a. Determine the activity cost associated with each patient.

   Abel Putin	$fill in the blank 1
   Cheryl Umit	$fill in the blank 2

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

   Abel PutinCheryl Umit

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

   Abel PutinCheryl Umit

   is more than the activity cost of the other patient.

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