Exercise 4-15 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 40%. 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 Driver $1,600,000 Professional hours 27,000 Number of patients 150,000 Square feet Cost Driver Quantity 10,000 600 1,s00 The two main surgical units and their related data follow Service General surgery Orthopedic surgery Square Feet Hours Patients 400 200 2,500 7,500 600 900 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 Orthopedic surgery requires more space for patients, supplies, and equipment Required: 1.&2. Compute the cost per cost driver for each of the three ectivity 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 Orthopedic Sarpery Activity Activity driver incurred Overhead assigned Overhead Cost Activity Drivers Activity driver incured Overhoad assigned Activity Rate Professional salaries Professional hours Patent services and supplies Number of patents Buldng cost Square feet