Assume Mountain View Hospital uses an activity$-$based budgeting approach for all costs except physician care. Some of the patients are treated in the emergency room as outpatients. Others are admitted to the hospital for additional tests and treatments. Its emergency room has three activity areas with cost drivers as follows:

$1.$ Reception$$paperwork of incoming patients. Cost driver is the number of forms completed.

$2.$ Treatment$$initial diagnosis and treatment of patients. Cost driver is the number of diagnoses treated.

$3.$ Cleaning$$general cleaning plus preparing treatment facilities for next patient. Cost driver is the number of people visiting the emergency room.

Budgeted Amount of Cost Driver

Activiy Area Cost Driver Rates Outpatients Admitted Patients

Reception $ $209,200$ forms $8,800$ forms

Treatment $1754,600$ diagnoses $2,200$ diagnoses

Cleaning $304,500$ people $3,000$ people