Orthopedic Solutions is a full-service clinic for children with hip problems. There are two main types of patients, the luxation patients (L) and the dysplasia patients (D). The L-patients need more intensive monitoring. They visit the hospital three times a month. Alternatively D-patients are treated at home (once a month) via easier techniques that use standard supplies. This treatment is monitored by staff-visits of 'Orthopedic Solutions Inc.'. The following information is available with regard to these treatments.

Currently there is a discussion going on about cost allocation. Using the number of treatments as allocation base is one option that most hospitals tend to use. Some hospitals use the direct cost base as an allocation base for overhead. Nevertheless, the alternative is a more detailed analysis of overhead: The general overhead for these treatments consists of two activities namely 1) nursing services (with skilled A-level and lower skilled B-level staff) and 2) specialized machine activity. Full-time equivalents and the percentage of machine usage are potential allocation bases. The following data is available for analysis: