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 $ 2,040,000 Surgical hours (SH) Patient services Building cost 36,000 372,000 Number of patients Square feet Budgeted Activity Usage 10,000 400 2,400 The two main surgical units and their actual activity usage follow. Actual Activity Usage Surgical Service Hours General surgery 2,900 Patients 300 Square Feet orthopedic surgery 7,100 100 720 1,680 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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