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 reimbursements by as much as 30%. As a result, the clinic wants to better understand its costs. It decides to prepare an activity-based cost analysis, including an estimate of the average cost of both general surgery and orthopedic surgery. The clinic's three activity cost pools and their cost drivers follow Activity Cost Pool Professional salaries Patient services and supplies Building cost Cost $1,144,000 18,720 96,600 Cost Driver Professional hours Number of patients Square feet Driver Quantity 8,800 480 1,380 The two main surgical units and their related data follow. Service General surgery Orthopedic surgery Hours 1,900 6,900 Square Feet* 540 840 Patients 340 140 * 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 Activity Orthopedic Surgery Activity driver Overhead incurred assigned Overhead Cost Activity driver incurred Activity Rate Overhead assigned Professional salaries Activity Drivers Professional hours Number of patients Square feet Patient services and supplies Building cost