DBC$,$ TDABC, and ABC

The Bienestar Cardiology Clinic has two major activities: diagnostic and treatment. The two activities use four resources: nursing, medical technicians, cardiologists, and equipment. Detailed interviews have provided the following work distribution matrix shown below.

Resources

Activity Nursing Technicians Cardiologists Equipment Total Activity

Time

Diagnosing patients $0\mathrm{.}700\mathrm{.}800\mathrm{.}400\mathrm{.}6012,000$ hrs$.$

Treating patients $0\mathrm{.}300\mathrm{.}200\mathrm{.}600\mathrm{.}408,000$ hrs$.$

Total time $($hrs$.)4,0004,0006,0006,00020,000$

Cost $$80,000$ $$80,000$ $$320,000$ $$320,000$

The total time estimated corresponds to practical capacity $($interviewers adjusted the total time to about $80$ percent of the available time$).$ The equipment time is measured in machine hours. Thus, the total time $($at practical capacity$)$ in the system is $20,000$ hours. In considering the implementation of a TDABC model, the following unit times and transaction information are also provided:

Unit Time Driver Expected Activity

Driver Quantity

Diagnosing patients $3$ hrs No$.$ of patients $4,000$

Treating patients $0\mathrm{.}8$ hr$.$ No$.$ of treatments $10,000$

The clinic has identified three types of patients: those with no heart disease, those with mild heart disease, and those with severe heart disease. The following additional data are provided:

Patient Type Diagnosing Patients Treating Patients Average Time Spent Servicing

Each Patient Type $($Cycle Time$)$

No disease $2,00003$ hrs$.$

Mild disease $1,5005,0005\mathrm{.}6$ hrs$.$

Severe disease $5005,00011\mathrm{.}0$ hrs$.$

Activity cost $??$

Required:

$1.$ Calculate the activity costs for diagnosing and treating patients. Using the activity costs calculated, calculate the unit cost of servicing each type of patient using traditional ABC.

Activity rates

Diagnosing $?$

Treating $?$

Calculate the unit cost of servicing each type of patient using traditional ABC.

Unit Cost

No Disease $?$

Mild $?$

Severe $?$

$2.$ Using TDABC$-$derived activity rates, calculate the unit cost of servicing each type of patient. If required round your answer to two decimal places.

Activity rates

Diagnosing $?$

Treating $?$

Unit Cost

No Disease $?$

Mild $?$

Severe $?$

DBC$,$ TDABC, and ABC

The Bienestar Cardiology Clinic has two major activities: diagnostic and treatment. The two activities use four resources: nursing, medical technicians, cardiologists, and

equipment. Detailed interviews have provided the following work distribution matrix shown below.

Resources

The total time estimated corresponds to practical capacity $($interviewers adjusted the total time to about $80$ percent of the available time$).$ The equipment time is

measured in machine hours. Thus, the total time $($at practical capacity$)$ in the system is $20,000$ hours. In considering the implementation of a TDABC model, the following

unit times and transaction information are also provided:

The clinic has identified three types of patients: those with no heart disease, those with mild heart disease, and those with severe heart disease. The following additional

data are provided: Required:

Calculate the activity costs for diagnosing and treating patients. Using the activity costs calculated, calculate the unit cost of servicing each type of patient using

traditional ABC.

Activity rates

Calculate the unit cost of servicing each type of patient using traditional ABC.

Unit Cost

Using TDABC$-$derived activity rates, calculate the unit cost of servicing each type of patient. If required round vour answer to two decimal places. Using TDABC$-$derived activity rates, calculate the unit cost of servicing each type of patient. If required round your answer to two decimal places.

Activity rates

Using DBC$,$ calculate the unit cost of servicing each type of patient. If required round your answer to two decimal places.