Glencoe Medical Clinic operates a cardiology care unit (CCU) and a maternity care unit (MCU). Currently, all cardiology patients are charged the same rate per patient day for daily care services, which consists of occupancy, feeding and nursing care. Recent study reveals that: Demand patients place on daily service vary with severity of the case Occupancy is combination of two activities: lodging and use of monitoring equipment. Cost of monitoring activity were directly traceable. The lodging costs shared by two activities: lodging cardiology patients and lodging maternity care with total cost $5,700,000 per year consists of building depreciation, maintenance, and utilities. Lodging costs would be assigned to each unit based on square feet. The cardiology floor and maternity floor each occupy 20,000 square feet. Daily rate should reflect the difference in demand resulting from difference in patient type To compute a daily rate, the following annual data were collected: Activity Cost of Activity Activity Driver Quantity Lodging $2,850,000 Patients Day 22,500 Monitoring $2,100,000 Monitoring hours used 30,000 Feeding $450,000 Patients Day 22,500 Nursing Care $4,500,000 Nursing Hours 225,000 Total $9,900,000 The demands associated with patient severity are as follow: Severity Patient Days Monitoring Hours High 7,500 15,000 Medium 11,250 12,000 Low 3,750 3,000 Nursing Hours 135,000 75,000 15,000 Required: 1. Suppose that the costs of daily care are assigned using only patient days as the activity driver. Compute the daily rate (4 points) Compute activity rate using given activity drivers (combine activities with the same driver) (6 points) Compute the charge per patient day for each patient type based on rate in question 2 (6 points) Compare your answer in no 1 and 3. Comment the result (4 points) 2. 3. 4