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Uuti pruuuct line. U ule wllormation in requirement 4 to reduce costs. 539 ABC, health care. Crosstown Health Center runs two programs: drug addict rehabilitation

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Uuti pruuuct line. U ule wllormation in requirement 4 to reduce costs. 539 ABC, health care. Crosstown Health Center runs two programs: drug addict rehabilitation and after are (counseling and support of patients after release from a mental hospital). The center's budget for 2017 follows. Professional salaries: 4 physicians x $150,000 12 psychologists X $75,000 $600,000 18 nurses X $30,000 900,000 Medical supplies 480,000 $1,980,000 Rent and clinic maintenance 242,000 Adorinistrative costs to manage patient charts, food, laundry 138,600 Laboratory services 484,000 92,400 Total $2,937,000 Kim Yu, the director of the center, is keen on determining the cost of each program. Yu compiles the follow- ing data describing employee allocations to individual programs: Drug Aftercare Total Employees Physicians 4 Psychologists 4 8 12 Nurses 6 10 Yu has recently become aware of activity-based costing as a method to refine costing systems. She asks her accountant, Gus Gates, how she should apply this technique. Gates obtains the following budgeted information for 2017: 4 110 Drug Aftercare Total Square feet of space occupied by each program 9,000 12,000 21,000 Patient years of service Number of laboratory tests 1,400 700 2,100 1. a. Selecting cost-allocation bases that you believe are the most appropriate for allocating indirect costs to programs, calculate the budgeted indirect cost rates for medical supplies; rent and clinic maintenance; administrative costs for patient charts, food, and laundry, and laboratory services. b. Using an activity-based costing approach to cost analysis, calculate the budgeted cost of each program and the budgeted cost per patient-year of the drug program

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