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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
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 $240 per day Radiology $215 per image Pharmacy $50 per physician order Chemistry lab $80 per test Operating room $1,000 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of days 6 days 4 days Number of images 4 images 3 images Number of physician orders 6 orders 2 orders Number of tests 5 tests 4 tests Number of operating room hours 8 hours 4 hours Instructions Abel Putin Cheryl Umit Final Question Instructions Radiology $215 per image Pharmacy $50 per physician order Chemistry lab $80 per test $1,000 per operating room hour Operating room The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of days 6 days 4 days Number of images 4 images 3 images Number of physician orders 6 orders 2 orders Number of tests 5 tests 4 tests Number of operating room hours 8 hours 4 hours Required: a. Determine the activity cost associated with each patient. b. Why is the total activity cost different for the two patients
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