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Check my work Surgery Center is an outpatient surgical clinic that was profitable for many years, but Medicare has cut its reimbursements by as much
Check my work Surgery Center is an outpatient surgical clinic that was profitable for many years, but Medicare has cut its reimbursements by as much as 50%. As a result, the clinic wants to better understand its costs. It decides to prepare an activity-based cost analysis, including an estimate of the average cost of both general surgery and orthopedic surgery. The clinic's three activity cost pools and their cost drivers follow. Activity Cost Pool Professional salaries Patient services and supplies Building cost Cost $2,320,000 40,280 232,400 Cost Driver Professional hours Number of patients Square feet Driver Quantity 11,600 760 1,660 ed k The two main surgical units and their related data follow. t Service General surgery Orthopedic surgery Hours 3,300 8,300 Square Feet* 680 980 Patients 480 ht 280 ences * Orthopedic surgery requires more space for patients, supplies, and equipment. Required: 1. & 2. Compute the cost per cost driver for each of the three activity cost pools. Use the results to allocate costs to both the general surgery and the orthopedic surgery units. Compute total cost and average cost per patient for both the general surgery and the orthopedic surgery units. (Round your final answers to whole dollar.) Prey 4 of 7 SEE Next >
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