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 Scheduling and admitting Housekeeping Budgeted Activity Cost $432,000 4,212.000 5,376,000 $10,020,000 Activity Base Number of patients Number of patient days Weighted care unit Nursing Total costs 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, (me average patient-is expected to have a auttle 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 Base Usage Procedure A Number of patients 280 Average length of stay 6 days Previous Next > Email Instructor Submit Test for Grading Activity-Base Usage Procedure A 280 x 6 days 1,680 19,200 Number of patients Average length of stay Patient days Weighted care units Procedure B Number of patients Average length of stay Patient days - Weighted care units Procedure Number of patients Average length of stay Patient days Weighted care units 650 x 5 days 3,250 6,000 I 1,200 x 4 days 4,800 24,000 Private insurance remburses the hospital for these activities at a fixed daily rate of $406 per patient day for all three procedures Required: 1. Determine the activity rates. Previous Nes Email Instructor Submit Test for Required: 1. Determine the activity rates. Activity Activity Rate Scheduling and admitting per patient Housekeeping per pd Nursing per wcu 2. Determine the activity cost for each procedure. Total Activity Activity Cost by Procedure Procedure A Procedure B Email Instructor Submit Test for Grading Activity Cost by Procedure Procedure A Procedure B Procedure 3. Determine the excess or deficiency of reimbursements to activity cost. Excess (deficiency) of reimbursement over Activity activity cost Procedure A Procedure B Procedure 4. Based on the determination of the excess or deficiency of reimbursement to activity cost, indicate which procedure cost is too high Accounting numeric field 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 weighted care units per patient day Previous Ne Email Instructor Submit Test for
