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 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 | $252 per day |
| Radiology | $200 per image |
| Pharmacy | $49 per physician order |
| Chemistry lab | $74 per test |
| Operating room | $1,090 per operating room hour |
The activity usage information associated with the two patients is as follows:
| Patient Putin | Patient Umit | |
|---|---|---|
| Number of days | 6 days | 3 days |
| Number of images | 3 images | 2 images |
| Number of physician orders | 7 orders | 1 orders |
| Number of tests | 6 tests | 3 tests |
| Number of operating room hours | 7 hours | 3 hours |
| Patient Putin | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Activity | Activity- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Base | Activity | Activity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Usage | X | Rate | = | Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Room and meals | selector 1 days hrs. images orders tests | selector 2 /day /hr. /image /order /test | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Radiology | selector 3 days hrs. images orders tests | selector 4 /day /hr. /image /order /test | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pharmacy | selector 5 days hrs. images orders tests | selector 6 /day /hr. /image /order /test | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chemistry lab | selector 7 days hrs. images orders tests | selector 8 /day /hr. /image /order /test | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating room | selector 9 days hrs. images orders tests | selector 10 /day /hr. /image /order /test | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total activity cost
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Auditing and Assurance Services An Applied Approach
Authors: Iris Stuart
1st edition
73404004, 978-0073404004
