CT 17-1:

East valley hospital is a primary medical care facility and trauma center that serve 11 small, rural midwestern communities within a 40-mile radius. The hospital offers all the medical/surgical services of a typical small hospital. It has a staff of 18 fill time doctors and 20 part time visiting specialists. East valley has a payroll of 15 employees consisting of technicians, nurses, therapists, managers, directors, administrators, dieticians, secretaries, data processor, and janitors.

With the class divided into groups, discuss and answer the following.

a) using your(limited, moderate, or in-depth) knowledge of a hospitals operations, identify as many activities as you can that would serve as the basis for implementing an activity-based costing system.

b) For each of the activities listed in (a), identify a cost driver that would serve a s a valid measure of the resources consume by the activity.