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Health Co-op is an outpatient surgical clinic that wants to better understand its costs. It decides to prepare an activi analysis, including an estimate of
Health Co-op is an outpatient surgical clinic that wants to better understand its costs. It decides to prepare an activi analysis, including an estimate of the average cost of both general surgery and orthopedic surgery. The clinic's thre their cost drivers follow Cost Center Professional salaries Patient services and supplies Building cost Cost Cost Driver Professional hours Number of patients Driver Quantity 11,000 $2,035,000 35,000 200,000 Square feet 700 1,600 The two main surgical units and their related data follow Service General surgery Orthopedic surgery Square Feet*Patients Hours 3,000 8,000 450 250 650 950 Orthopedic surgery requires more space for patients, supplies, and equipment. Round activity rate answers to 2 decimal places, and all other answers to nearest whole number.) 1. Assume costs are allocated based on number of patients. Compute the average cost per patient. Average cost per patient 2. Compute the cost per cost driver for each of the three cost centers Activity Overhead Cost Activity Drivers Activity Rate Professional salaries Patient services and supplies Building cost Professional hours Number of patients Square feet per professional hour per patient per square foot se the results from part 2 to allocate costs from each of the three cost centers to the general surgery unit. Compute total cost and average cost per patient for the general surgery unit. General surgery Activity driver incurred Overhead assigned Activity rate per professional hour per patient per square foot Professional salaries Patient services and supplies Building cost
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