1. Identify the main activities at Asante Teaching Hospital by grouping together any costs that have the same cost driver and allocation volume. Fill in a chart with column headings titled "Activity", "Total cost pool", "Cost driver", "Allocation volume", "Allocation rate/cost per input", "Rate definition". Here is some extra information on overhead costs:
   1. The maternity ward has enough medical equipment to service 30 rooms at the same time. Each piece of medical equipment is capable of being used 22 hours a day year-round (365 days). 2 hours a day is enough for cleaning, maintenance, and upkeep. Courtney Young asked around and several nurses confirmed that they do not specifically track the hours of medical equipment each patient uses. To improve her cost study, Courtney Young spent a few days studying the use of medical equipment in the maternity ward. The data she collected was added to Exhibit 5.
   2. Insurance is medical malpractice insurance. Although there are fewer malpractice suits filed in South Africa than the U.S., they are still filed. The more complicated the case and the more time the medical team spends with the patients, the more likely a mistake is made which increases the odds that a malpractice suit is filed. Courtney Young asked around and several nurses confirmed that it was fair to assume that births that require more medical team time (all employees except the registration clerk) are more likely to result in a medical malpractice suit.
   3. Courtney isnt sure if Security and Groundskeeping are product costs or period costs. Further, she doesnt know if there is a great way to allocate these costs across services. However, she knows that the hospital wants to be sure that if they adopt a bundled price, that the bundled price covers all of the costs of running the hospital. Further, Courtney reasons that one of Asantes differentiating factors is that expectant mothers feel safe and enjoy the atheistic of Asante. She reasoned that the longer a mother stays in the hospital, the longer they need to be protected and the longer they will enjoy the nice groundskeeping.
   4. Courtney made clear that since the bundled price needs to cover all of the costs of running the hospital, general and administrative costs need to be considered in her analysis.
   5. The hospital is currently operating at a level that consistently uses all of the rooms available in the delivery ward.
   6. Courtney notes that a few salaried workers occasionally work overtime. They are not paid for this. Courtney believes this is immaterial to her calculations (i.e. not important enough to affect her calculations).

Exhibit 2: Selected Hospital Information Level 1 Level 2 Level 3 Total 4 3 Average Days in Maternity Ward Total Natural Birth Patients Total Maternity Ward Patients Total Maternity Ward Square Feet Total Hospital Square Feet 3 2160 3160 240 3349 390 3366 2790 9875 30294 455000 Exhibit 3: Total Maternity Ward Overhead (in R) Equipment Depreciation General and Administrative Insurance Utilities Rent Housekeeping Laundry Information Technology Dining Hall Security Groundskeeping Marketing 363,672 314,622 233,991 7,454,026 16,195,458 206,241 395,295 6,119,349 856,684 302,076 898,940 105,412 Exhibit 4- Annual Salaries for Maternity Ward Staff Position OB/GYN- Total for Team of 5 Pediatrician-Total for Team of 5 Midwife/Nurse- Total for a Team of 40 Resident- Team of 8 Registration Clerk- Total for a Team of 5 Practical Nurse- Total for a Team of 9 Salary 17,701,726 11,738,570 21,689,120 3,449,155 1,472,760 4,468,488 Exhibit 5- Breakdown of Mate Level 3 80 OB/GYN Pediatrician Midwife/Nurse Resident Registration Clerk Practical Nurse Equipment Time Staff Time per Delivery (minutes) Level 1 30 43 402 125 43 96 1050 Level 2 37 55 402 140 43 96 1236 71 550 252 60 110 1893 Exhibit 2: Selected Hospital Information Level 1 Level 2 Level 3 Total 4 3 Average Days in Maternity Ward Total Natural Birth Patients Total Maternity Ward Patients Total Maternity Ward Square Feet Total Hospital Square Feet 3 2160 3160 240 3349 390 3366 2790 9875 30294 455000 Exhibit 3: Total Maternity Ward Overhead (in R) Equipment Depreciation General and Administrative Insurance Utilities Rent Housekeeping Laundry Information Technology Dining Hall Security Groundskeeping Marketing 363,672 314,622 233,991 7,454,026 16,195,458 206,241 395,295 6,119,349 856,684 302,076 898,940 105,412 Exhibit 4- Annual Salaries for Maternity Ward Staff Position OB/GYN- Total for Team of 5 Pediatrician-Total for Team of 5 Midwife/Nurse- Total for a Team of 40 Resident- Team of 8 Registration Clerk- Total for a Team of 5 Practical Nurse- Total for a Team of 9 Salary 17,701,726 11,738,570 21,689,120 3,449,155 1,472,760 4,468,488 Exhibit 5- Breakdown of Mate Level 3 80 OB/GYN Pediatrician Midwife/Nurse Resident Registration Clerk Practical Nurse Equipment Time Staff Time per Delivery (minutes) Level 1 30 43 402 125 43 96 1050 Level 2 37 55 402 140 43 96 1236 71 550 252 60 110 1893