Assume that you are the chief accountant for a large hospital in Philadelphia. You believe that an Activity Based Costing system would be better in assigning costs to the various departments in the hospital, You want to implement the ABC system on 1/1/21. For the year 2021 you will run the ABC system parallel with your old overhead system.

Assume that the hospital has five main departments: Radiology, Medical, Surgical, Oncology and Neonatal Care.

You will not find this in your book, so do a little research, be creative, and come up with a list of Activity Cost Pools & Cost Drivers for each department. No dollar amounts are to be considered for this forum. For example, the Surgical Department might have General Surgery, Cardiovascular Surgery and Oncology Surgery as their Activity Cost Pools. The cost drivers might be Pre-Admission Testing Requirements, Number of Surgeries, Staff Required per Surgery & Post Anesthesia Care Unit (PACU).

Provide a list of Activity Cost Pools and Activity Cost Drivers for the other four departments.