Question
In the past, Hypochondriac Hospital allocated all of its overhead costs to patients based on nursing time. Hypochondriac has decided to switch to an activity
In the past, Hypochondriac Hospital allocated all of its overhead costs to patients based on nursing time. Hypochondriac has decided to switch to an activity based costing system using three activity cost pools. Information related to the new system is as follows: Activity Cost Pools Activity Measures Estimated Overhead Cost Expected Activity Registration Number of patients $75,000 1,000 patients Patient Care Nursing time $900,000 150,000 hours Billing Number of bills $120,000 2,500 bills Data concerning two patients follows: Patient Nursing time Number of bills Patient X 100 hours 2 Patient Y 60 hours 3 Compared to the old system, which of the two patients X and Y will be charged more overhead cost under the new activity-based costing system?
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