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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

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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 activity rates for the hospital indirect costs: Activity Activity Rate Room and meals $194 per day Radiology $274 per image Pharmacy $37 per physician order Chemistry lab $79 per test Operating room $840 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of days 2 days 8 days Number of images 4 images 6 images Number of physician orders 3 orders 5 orders Number of tests S tests 8 Tests Number of operating room hours 3.5 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? Cheryl Umit apparently had a different condition that required more extensive treatment. Thus, the activity cost to Cheryl Umit Vis more than the activity cost of the other patient.

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