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Deer Lodge Regional Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following
Deer Lodge Regional Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities andactivity rates for the hospital indirect costs:
Activity | Activity Rate | |
Room and meals | $225 | per day |
Radiology | $300 | per image |
Pharmacy | $50 | per physician order |
Chemistry lab | $125 | per test |
Operating room | $3,000 | per operating room hour |
The records of two representative patients were analyzed, using the activity rates. The activity information associated with the two patients is as follows:
Patient Franklin | Patient Kramer | |||
Number of days | 1 | days | 4 | days |
Number of images | 2 | images | 5 | images |
Number of physician orders | 1 | orders | 8 | orders |
Number of tests | 2 | tests | 5 | tests |
Number of operating room hours | 0.6 | hours | 2.8 | hours |
Determine the activity cost associated with each patient.
Activity Cost | |
Patient Franklin | $________ |
Patient Kramer | $________ |
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