Crane Orthopedics specializes in hip, knee, and shoulder replacement surgery. In addition to the actual surgery, the company provides its patients with preoperative and postoperative inpatient care in a fully equipped hospital. Crane pays its surgeons a fixed fee for each surgical procedure they perform. The company provides doctors and patients a variety of support services during treatment and allocates the cost of these activities through the company's costing system, which uses a single overhead rate. Currently, the company uses an allocation rate of 48% of the surgical fee charged to the patient. Managers have expressed concern that the current system is producing inaccurate costs and profitability for the joint replacement procedures. As a result, Bree Crane, the company's controller, initiated a study to explore the potential for implementing an activity-based costing system. She has collected the following data on each of the procedures. Hip Knee Shoulder Fee charged to patient $14,000 $16,000 $6,000 Number of procedures per year 1,000 500 600 Average time per procedure 4.0 hours 1.0 hours 2.0 hours Number of procedures per operating room session 2 1 4 Inpatient days per procedure 4 3 2 Surgeon's fee per procedure $1,200 $1,800 $1,500 Medical supplies per procedure $400 $200 $300 After analyzing the company's support activities, Bree determined that five activity cost pools would be sufficient for the company. The proposed activity cost pools, along with the proposed cost drivers, are presented below. Activity Cost Driver Total Cost Operating room preparation Number of sessions $954,500 Operating room use Procedure time 1,482,000 Nursing and ancillary services Inpatient days 4,087,000 Administration Sales revenue 3,072,000 Miscellaneous Number of procedures 798,000 $10,393,500 (b1) (a) Your answer is correct. Calculate the profit per procedure for each of the three procedures using the current basis for allocating overhead. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Profit (Loss) eTextbook and Media Hip 5680 Knee 6320 Shoulder 132 Attempts: 1 of 3 used Allocate costs to each procedure type using the proposed activity-based costing system. (For activity rates and overhead cost per procedure, round answers to 2 decimal places, e.g. 15.25. Round all other answers to O decimal places, e.g. 5,250.) Activity Cost Pool Operating room preparation Operating room use Nursing and ancillary services Administration Miscellaneous Total cost allocated Number of procedures Overhead cost per procedure eTextbook and Media Save for Later Activity rate Hip Attempts: 0 of 3 used Submit Answer A