Question
Item 3 Optimal Health is an outpatient surgical clinic. The clinics three activities, their overhead cost, and their cost drivers follow. Activity Budgeted Cost Activity
Item 3 Optimal Health is an outpatient surgical clinic. The clinics three activities, their overhead cost, and their cost drivers follow. Activity Budgeted Cost Activity Cost Driver Budgeted Activity Usage Supplies $ 2,700,000 Surgical hours (SH) 15,000 Patient services 30,000 Number of patients 400 Building cost 368,000 Square feet 2,300 The two main surgical units and their actual activity usage follow. Service Actual Activity Usage Surgical Hours Patients Square Feet General surgery 2,800 300 750 Orthopedic surgery 12,200 100 1,550 Required: 1. Compute activity rates using activity-based costing. 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit.
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