Question
Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Budgeted Cost Activity Cost
Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Budgeted Cost Activity Cost Driver Supplies $ 2,460,000 Surgical hours (SH) Patient services Building cost 48,000 385,000 Number of patients Square feet The two main surgical units and their actual activity usage follow. Actual Activity Usage Surgical Service Hours General surgery 3,100 Orthopedic surgery 11,900 Patients 600 200 Square Feet 700 1,800 Required: Budgeted Activity Usage 15,000 800 2,500 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. 1. Compute activity rates using activity-based costing. Activity Supplies Patient services Building cost Budgeted Cost Budgeted Activity Usage Activity Rate 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit. General surgery Supplies Patient services Building cost -----Activity Usage----- -----Activity rate-- Allocated Cost Overhead cost per patient Orthopedic Surgery Supplies Patient services Building cost -----Activity Usage----- -----Activity rate----- Allocated Cost
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