Apollo is a local hospital that offers two types of procedures. Currently, Apollo uses a simple system to calculate the overhead cost per treatment. This is done by taking the total overhead cost and dividing it by the number of treatments. Using this method, the full cost for each procedure is shown below:

Procedure	X	Y
Direct costs per procedure	2,610	1,560
Full cost per procedure	2,831	1,781

Recently, another competitor has implemented activity based costing (ABC). This has led the finance director to consider whether this alternative costing technique would bring any benefits. She has obtained an analysis of Apollos total overheads for the last year and some additional data, all of which is shown below:

Cost	Cost driver
Administrative costs	Administrative time per procedure	935,080
Nursing costs	Length of patient stay	3,127,808
Catering costs	Number of meals	483,488
General facility costs	Length of patient stay	4,276,800
		8,823,176

Procedure	X	Y
No. of procedures	24,000	16,000
Administrative time per procedure (hours)	3	1.5
Length of patient stay per procedure (hours)	36	18
Average no. of meals required per patient	6	2

Required:

1. Calculate the full cost per procedure using activity-based costing.

2. Based on your findings in part (a), advise the finance director as to whether activity-based costing should be implemented at Apollo.

(