Question
Crosswinds Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities
Crosswinds Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs: Activity Activity Rate Room and meals $177 per day Radiology $250 per image Pharmacy $63 per physician order Chemistry lab $82 per test Operating room $740 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of days 4 days 11 days Number of images 3 images 5 images Number of physician orders 6 orders 8 orders Number of tests 3 tests 6 tests Number of operating room hours 4 hours 7 hours a. Determine the activity cost associated with each patient. Abel Putin Cheryl Umit b. Why is the total activity cost different for the two patients?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started