Exercise 17-15 Activity-based costing LO P3 Surgery Center is an outpatient surgical clinic that was profitable for many years, but Medicare has cut its r as 40% As a result the clinic wants to better understand its estimate of the average cost of both general surgery and orthopedic surgery. The clinic's three activity cost p follow. eimbursements by as much costs. It decides to prepare an activity-based cost analysis, including an ools and their cost drivers Activity Cost Pool Professional salaries Patient services and supplies Building cost Cost Cost Driver $1, 008, 000 Professional hours Driver Quantity 8, 400 440 1, 340 16, 280 Number of patients 80, 400 Square feet The two main surgical units and their related data follow ServiceHours Square Feet Patients General surgery Orthopedic surgery6,700 1, 700 520 820 320 120 Orthopedic surgery requires more space for patients, supplies, and equipment Orthopedic surgery requires more space for patients, supplies, and equipment Required: 1.&2. Compute the cost per cost driver for each of the three activity cost pools. Use the results to allocate costs to both the general surgery and the orthopedic surgery units. Compute total cost and average cost per patient for both the general surgery and the orthopedic surgery units General Surgery Orthops Activity Drivers Activity driver Overhead Activity drive Overhead Cost Activity Rate incurred Patient services and supplies Building cost Professional hours Number of patients Square feet nd equipment. ivity cost pools. Use the results to allocate costs to both the general d average cost per patient for both the general surgery and the General Surgery Orthopedic Surgery Activity driver Overhead Activity driver Overhead ned Activity Rate rivers ssional hours ber of patients are teet incurred incurred