On October 31, the end of the first month of operations, Maryville Equipment Company prepared the following income statement, based on the varlable costing concept: 10 more Check My Work uses remaining Prepare an income statement under absorption costing. Product Costing and Decision Analysis for a Service Company Pleasant Stay Medical Inc. wishes to determine its product costs. Pleasant Stay offers a variety of medical procedures (operations) that are considered its "products." The overhead has been separated into three major activitles. The annual estimated activity costs and activity bases follow: Total "patient days" are determined by multiplying the number of patients by the average length of stay in the hospital. A weighted care unit (wcu) is a measure of nursing effort used to care for patients. There were 192,000 weighted care units estimated for the year. In addition, Pleasant Stay estimated 6,000 patients and 27,000 patient days for the year. (The average patient is expected to have a a littie more than a four-day stay in the hospital.) Private insurance reimburses the hospital for these activities at a fixed daily rate of $406 per patient day for all three procedures. Required: Private insurance reimburses the hospital for these activities at a fixed daily rate of $406 per patient day for all three procedures. Required: 1. Determine the activity rates. 2. Determine the activity cost for each procedure. 3. Determine the excess or deficiency of reimbursements to activity cost. 3. Determine the excess or deficiency of reimbursements to activity cost. 4. Based on the determination of the excess or deficiency of reimbursement to activity cost, indicate which procedure cost is too high. Hospital management has decided to further investigate the nursing effort. Determine the weighted care units per patient days for each procedure. Round to one decimal place. Procedure A weighted care units per patient day Procedure B weighted care units per patlent day Procedure C weighted care units per patient day On October 31, the end of the first month of operations, Maryville Equipment Company prepared the following income statement, based on the varlable costing concept: 10 more Check My Work uses remaining Prepare an income statement under absorption costing. Product Costing and Decision Analysis for a Service Company Pleasant Stay Medical Inc. wishes to determine its product costs. Pleasant Stay offers a variety of medical procedures (operations) that are considered its "products." The overhead has been separated into three major activitles. The annual estimated activity costs and activity bases follow: Total "patient days" are determined by multiplying the number of patients by the average length of stay in the hospital. A weighted care unit (wcu) is a measure of nursing effort used to care for patients. There were 192,000 weighted care units estimated for the year. In addition, Pleasant Stay estimated 6,000 patients and 27,000 patient days for the year. (The average patient is expected to have a a littie more than a four-day stay in the hospital.) Private insurance reimburses the hospital for these activities at a fixed daily rate of $406 per patient day for all three procedures. Required: Private insurance reimburses the hospital for these activities at a fixed daily rate of $406 per patient day for all three procedures. Required: 1. Determine the activity rates. 2. Determine the activity cost for each procedure. 3. Determine the excess or deficiency of reimbursements to activity cost. 3. Determine the excess or deficiency of reimbursements to activity cost. 4. Based on the determination of the excess or deficiency of reimbursement to activity cost, indicate which procedure cost is too high. Hospital management has decided to further investigate the nursing effort. Determine the weighted care units per patient days for each procedure. Round to one decimal place. Procedure A weighted care units per patient day Procedure B weighted care units per patlent day Procedure C weighted care units per patient day
