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 activities. The annual estimated activity costs and activity bases follow: Activity Budgeted Activity Cost $432,000 Scheduling and admitting Housekeeping Nursing Activity Base Number of patients Number of patient days Weighted care unit 4,212,000 5,376,000 Total costs $10,020,000 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 little more than a four-day stay in the hospital.) During a portion of the year, Pleasant Stay collected patient information for three selected procedures, as follows: Activity-Basellsan auf : During a portion of the year, Picasant Stay collected patient Information for three selected procedures, as follows: Activity-Base Usage Procedure A Number of patients 280 Average length of stay 5 TV Patient days 1,500 Weighted care units 10.200 Procedure Number of patients 350 Average length of stay x 5 days Patient days 3.250 Weighted care units 6.000 Procedure Number of patients 1.200 Average length of stay X 4 days Patient days 1,300 Weighted care units 24.000 Private Insurance reimburses the hospital for these activities at a fixed daily rate of $406 par patient day for all three procedures. 1. Determine the activity rates Activity Rate Activity Scheduling and admitting Housekeeping perd DAT WOU Nursing 2. Determine the activity cost for each procedure. Activity Total Activity Cost by Procedure Procedura Procedure Procedura 3. Determine the excess or deficiency of reimbursements to activity cost Excess (deficiency) of reimbursement over Activity activity cost Procedure Procedures Procedure 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. 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 patient day Procedure c weighted care units per patient day
