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Patient Health is an outpatient surgical clinic that was profitable for many years, but Medicare has cut its reimbursements by as much as 50%. As

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Patient Health is an outpatient surgical clinic that was profitable for many years, but Medicare has cut its reimbursements by as much as 50%. As a result, the clinic wants to better understand its costs. It decides to prepare an activity-based cost analysis, including an estimate of the average cost of both general surgery and orthopedic surgery. The clinic's three cost centers and their cost drivers follow. Cost Center Professional salaries Patient services and supplies Building cost Coat Cost Driver $2,090,000 Professional hours 26,000 Number of patients 341,000 square feet Driver Quantity 11,000 400 3,100 810 The two main surgical units and their related data follow, Service Hours Square Feet Patients General surgery 3,600 300 Orthopedic surgery 7.400 2,290 100 *Orthopedic surgery requires more space for patients, supplies, and equipment Required: Complete the below table. 1. Compute the cost per cost driver for each of the three cost conter Activity Overhead Cost Activity Drivers Professional salaries 2,090,000 11,000 Professional hours Patient services and supplies 26,000 400 Number of patients Building cost 341,000 3.100 square feet Activity Rato $ 190.00 per professional hour $ 65.00 per patient $ 110.00 per square foot 2. Use the results from part 1 to allocate costs from each of the three cost centers to both the general surgery and the orthopedic Surgory units. Compute total cost and average cost per patient for both the general surgery and the orthopedic surgery units General surgery Activity rate- Activity driver Overhead assigned Incurred Professional salaries $ 684,000 Patient services and supplies 19.500 Building cost 1. Compute the cost per cost driver for each of the three cost centers. Activity Overhead Cost Activity Drivers Professional salaries $ 2,090,000 11,000 Professional hours Patient services and supplies 28,000 400 Number of patients Building cost 341,000 3.100 square feet Activity Rato $ 190.00 per professional hour $ 65.00 per patient $ 110.00 per square foot 2. Use the results from part 1 to allocato costs from each of the three cost centers to both the general surgery and the orthopedic surgery units. Compute total cost and average cost por patient for both the general surgery and the orthopedic surgery units. General surgery Activity rate- Activity driver incurred Overhead assigned Professional salaries 684,000 Patient services and supplies 19,500 Building cost 300 Average cost per patient 2,642 Activity rate----- Activity driver incurred Overhead assigned 0 Orthopedic Surgery Professional salaries Patient services and supplies Building cost 0 0

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