The Bienestar Cardiology Clinic has two major activities diagnostic and treatment The two activites use four resources nursing, medical technicians, cardiologists, and equipment Detailed interviews have provided the work distribution matrix shown below Activity Nursing Technicians Cardiologists Equipment Total Activity Time Diagnosing Patients 0 70 0 80 0 40 0 60 12000 hrs Treating patients 0 30 0 20 0 60 0 40 8000 hrs Total time (hrs) 4000 4000 6000 6000 20000 Cost $80000 $80000 $320000 $320000 The total time estimated cooresponds to practival capacity (interviewers adjusted the total time to about 80 of the available time) The equipment time is measured in machine hours Thus, the total time (at practical capacity) in the system is 20000 hours In considering the implementation of the TDABC model, the following unit times and transaction information are also provided Unit time Driver Expected activity driver quantity Diagnosing patients 3 hrs No of patients 4000 Treating patients 0 8 hrs No of treatments 10000 Calculate the cost of each activity using the indicated values of the resource drivers Calculate the capacity cost rate for TDABC Using the capacity cost rate, calculate eht cost of each activity under TDABC Compare these values with those obtained in Requirement 1 and discuss possible reasons for any differences Suppose that the actual activity driver quantities are 3500 and 9000 Calculate the cost of unused capacity Suppose that the clinic acquires new equipment that reduces the total time required for the two activities from 6000 to 4000 hours The equipment cost remains the same Explain how the ABC system would be updated and then describe how TDABC would provide updates Suppose that diagnosing patients without any cardiac disease takes two hours while diagnosing patients with mildly diseased hearts takes an additional 1 5 hours and those with more severe problems takes and additional two hours Prepare a time equation and, using the capacity cost rate from Requirement 2, calculate the activity rate for each of the three types of patients

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The Bienestar Cardiology Clinic has two major activities: diagnostic and treatment. The two activites use four resources; nursing, medical technicians, cardiologists, and equipment. Detailed interviews

The Bienestar Cardiology Clinic has two major activities: diagnostic and treatment. The two activites use four resources; nursing, medical technicians, cardiologists, and equipment. Detailed interviews have provided the work distribution matrix shown below.

Activity	Nursing	Technicians	Cardiologists	Equipment	Total Activity Time
Diagnosing Patients	0.70	0.80	0.40	0.60	12000 hrs
Treating patients	0.30	0.20	0.60	0.40	8000 hrs
Total time (hrs)	4000	4000	6000	6000	20000
Cost	$80000	$80000	$320000	$320000

The total time estimated cooresponds to practival capacity (interviewers adjusted the total time to about 80% of the available time). The equipment time is measured in machine hours. Thus, the total time (at practical capacity) in the system is 20000 hours. In considering the implementation of the TDABC model, the following unit times and transaction information are also provided:

	Unit time	Driver	Expected activity driver quantity
Diagnosing patients	3 hrs	No of patients	4000
Treating patients	0.8 hrs	No of treatments	10000

Calculate the cost of each activity using the indicated values of the resource drivers.

Calculate the capacity cost rate for TDABC. Using the capacity cost rate, calculate eht cost of each activity under TDABC. Compare these values with those obtained in Requirement 1 and discuss possible reasons for any differences.

Suppose that the actual activity driver quantities are 3500 and 9000. Calculate the cost of unused capacity.

Suppose that the clinic acquires new equipment that reduces the total time required for the two activities from 6000 to 4000 hours. The equipment cost remains the same. Explain how the ABC system would be updated and then describe how TDABC would provide updates.

Suppose that diagnosing patients without any cardiac disease takes two hours while diagnosing patients with mildly diseased hearts takes an additional 1.5 hours and those with more severe problems takes and additional two hours. Prepare a time equation and, using the capacity cost rate from Requirement 2, calculate the activity rate for each of the three types of patients.