Question 2 Safe Haven Health Centre runs two programs: Drug addict rehabiltation and Aftercare counselling and support of patients after release from a mental hospital. The centre's budget for 2020 is as follows: Amount ($1 Amount ($) 500.000 900,000 480.000 Particulars Professional salaries 4 doctors x $150,000 12 psycholog SSX575,000 16 nurses $30,000 Medical supplies Rent and clinic maintenance Administrative costs to manage patient charts, food, and laundry service Laboratory services Total 1.980.000 220.000 126.000 440.000 24 RAA Jess Bond, the director of the centre, is keen on determining the cost of each program. Jess complied the following data describing employee allocations to Individual programs: Particulars Drug addict rehabilitation Aftercare counselling and support Doctors Psycholog 55 Jess recently became aware of activity-based costing as a method to refine oosting systems She asks her accountant Daisy Dlard, how she should apply this technique. Daisy obtains the following budgeted Information for 2020: Particulars Total Drug addict rehabilitation Aftercare counselling and support 1,200 900 2,100 Square meters of space occupied by each program Patent years of service Number of laboratory tests 50 1.400 60 700 2.100 Required: (a) Select cost-allocation bases that you believe are the most appropriate for allocating Indirect costs to programs. ACCT1068 Final Assessment SIM, Semester 1, 2020 Page 3 of 5 (b) Based on the cost-allocation bases selected in requirement (a) above, calculate the Indirect rates for medical supplies, rent and clinic maintenance administrative costs for patient charts, food and laundry services, and laboratory services (c) Using an activity-based costing approach to cost analysis, calculate the cost of each program and the cost per patient year of the drug addict rehabilitation program. (d) Note two benefits that Safe Haven Health Centre can obtain by Implementing the activity-based costing system? (2+292 - 15 Marks)