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Time-Driven Activity-Based Costing Compared to ABC: Stage 1 The Bienestar Cardiology Clinic has two major activities: diagnostic and treatment. The two activities use four
Time-Driven Activity-Based Costing Compared to ABC: Stage 1 The Bienestar Cardiology Clinic has two major activities: diagnostic and treatment. The two activities use four resources: nursing, medical technicians, cardiologists, and equipment Detailed interviews have provided the following work distribution matrix shown below, Resources Total Activity Activity Nursing Technicians Cardiologists Equipment Time Diagnosing patients 0.70 0.80 0.40 0.60 12,000 hrs. Treating patients 0.30 0.20 0.00 0.40 8,000 hrs. Total time (hrs.). 4,000 4,000 6,000 6,000 20,000 Cost $80,000 $80,000 $320,000 $320,000 The total time estimated corresponds to practical capacity (interviewers adjusted the total time to about 80 percent of the available time). The equipment time is measured in machine hours. Thus, the total time (at practical capacity) in the system is 20,000 hours. In considering the implementation of a TDABC model, the following unit times and transaction information are also provided: Diagnosing patients Treating patients Required: Unit Time Driver Expected Activity Driver Quantity 3 hrs No. of patients 4,000 0.8 hr No. of treatments 10,000
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