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Health Co-op is an outpatient surgical clinic that wants to better understand its costs. It decides to prepare an activity-based cost analysis, including an estimate

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Health Co-op is an outpatient surgical clinic that 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 cost centers and their cost drivers follow. Cost Center Professional salaries Patient services and supplies Building cost Cost $2,520,000 44,000 255,000 Cost Driver Professional hours Number of patients Square feet Driver Quantity 12,000 800 1,700 The two main surgical units and their related data follow. Service General surgery Orthopedic surgery Hours 3,500 8,500 Square Feet* 700 1,000 Patients 500 300 *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 Professional salaries 2,520,000 12,000 Professional hours Patient services and supplies $ 44,000 800 Number of patients Building cost $ 255,000 1,700 Square feet Activity Rate $ 210.00 per professional hour $ 55.00 per patient $ 150.00 per square foot

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