1. Mayo Clinic and Cleveland Clinic allocate their healthcare operating costs using activity-based costing. The following table summarizes the costs and cost drivers:

Department	Mayo Clinic Total Cost ($)	Cost Driver	Cost Driver Quantity	Cleveland Clinic Total Cost ($)
Emergency Room	$2,000,000	Number of visits	20,000 visits	$1,800,000
Surgery	$3,500,000	Surgery hours	50,000 hours	$3,000,000
Pediatrics	$1,500,000	Number of patients	30,000 patients	$1,200,000
Total	$7,000,000			$6,000,000

• Mayo Clinic had 25,000 emergency room visits, performed 60,000 surgery hours, and treated 35,000 pediatric patients.
• Allocate healthcare operating costs per visit, per surgery hour, and per patient for Mayo Clinic and Cleveland Clinic using activity-based costing.
• Discuss how differences in costs per patient impact the operational efficiency and patient care quality at Mayo Clinic and Cleveland Clinic.