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The company allocated all of its overhead cost to patiends based on nursing time. They decided to switch to an activity based on costing system
The company allocated all of its overhead cost to patiends based on nursing time. They decided to switch to an activity based on costing system using three activity cost pools. Information related to the new system is as follows
Activity Cost Pools | Activity Measures | Estimated Overhead | Expected Activity |
Registration | Number of patients | $75000 | 1000 patients |
Patient Care | Number time | $900000 | 150000 hours |
Billing | Number of Bills | $120000 | 2500 bills |
Data concerning two patients follows:
Patient | Nursing Time | Number of bills |
Patient X | 100 hours | 2 |
Patient Y | 60 hours | 3 |
Compared to the old system, which of the two patients will be charged more overhead cost under the new activity-based costing system?
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