Activity-Based Costing for a Service Company Crosswinds Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs: Activity Activity Rate Room and meals $271 per day Radiology $382 per image Pharmacy $37 per physician order Chemistry lab $103 per test Operating room $680 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of days 2 days 10 days Number of images 2 images 8 images Number of physician orders 4 orders 6 orders Number of tests 5 tests 8 tests Number of operating room hours 2 hours 6.5
Activity-Based Costing for a Service Company Crosswinds Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs: Activity Activity Rate Room and meals $271 per day Radiology $382 per image Pharmacy $37 per physician order Chemistry lab $103 per test Operating room $680 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of days 2 days 10 days Number of images 2 images 8 images Number of physician orders 4 orders 6 orders Number of tests 5 tests 8 tests Number of operating room hours 2 hours 6.5
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Activity-Based Costing for a Service Company
Crosswinds Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs:
| Activity | Activity Rate | |
| Room and meals | $271 | per day |
| Radiology | $382 | per image |
| Pharmacy | $37 | per physician order |
| Chemistry lab | $103 | per test |
| Operating room | $680 | per operating room hour |
The activity usage information associated with the two patients is as follows:
| Abel Putin | Cheryl Umit | |||
| Number of days | 2 | days | 10 | days |
| Number of images | 2 | images | 8 | images |
| Number of physician orders | 4 | orders | 6 | orders |
| Number of tests | 5 | tests | 8 | tests |
| Number of operating room hours | 2 | hours | 6.5 | hours |
a. Determine the activity cost associated with each patient.
| Abel Putin | $fill in the blank 1 |
| Cheryl Umit | $fill in the blank 2 |
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