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Big City Medical Associates operates a walk-in medical clinic in Tempe, Arizona. (Click the icon to additional information.) Chen has recently become aware of activity-based

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Big City Medical Associates operates a walk-in medical clinic in Tempe, Arizona. (Click the icon to additional information.) Chen has recently become aware of activity-based costing as a method to refine costing systems. She asks her accountant, Bob Wilson, how she should apply this technique. Wilson obtains the following budgeted information for 2020 : (Click the icon to view the budget data.) Read the requirements. Requirement 1. a. Selecting cost-allocation bases that you believe are the most appropriate for allocating indirect costs to departments, calculate the budgeted indirect cost rates for medical supplies, rent and clinic maintenance, laboratory services, and general overhead. Begin by completing the table below to identify the most appropriate cost driver for each cost. More info The clinic includes two different departments, Urgent Care, which serves patients with minor to moderate acute illnesses and injuries, and Living Well, which administers vaccines, school and work physicals, and conducts workshops on healthy living topics. The center's budget for 2020 follows. More info More info General overhead, including administrative staff Total 750,000$4,466,000 Kendall Chen, the director of the clinic, is keen on determining the cost of each department. Chen compiles the following data describing employee allocations to individual programs: Data table Requirements 1. a. Selecting cost-allocation bases that you believe are the most appropriate for allocating indirect costs to departments, calculate the budgeted indirect cost rates for medical supplies, rent and clinic maintenance, laboratory services, and general overhead. b. Using an activity-based costing approach to cost analysis, calculate the budgeted cost of each department and the budgeted cost per patient visit of each department. c. What benefits can Big City Medical Associates obtain by implementing the ABC system? 2. What factors, other than cost, do you think Big City Medical Associates should consider in allocating resources to its departments

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