2 Activity-based costing for a service companyCrosswinds 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:ActivityActivity RateRoom and meals$177 per dayRadiology$250 per imagePharmacy$48 per physician orderChemistry lab$87 per testOperating room$860 per operating room hourThe activity usage information associated with the two patients is as follows:Abel PutinCheryl UmitNumber of days10 days.Number of images8 imagesNumber of physician orders7 ordersNumber of tests7 testsNumber of operating room hours7 hoursThis information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.XOpen spreadsheet4 days4 images5 orders.4 tests2.5 hoursa. Determine the activity cost associated with each patient.Abel Putin sCheryl Umit $b. Why is the total activity cost different for the two patients?apparently had a different condition that required more extensive treatment. Thus, the activity cost tois more than the activity cost of the other patient.

Under activity-based costing method, the cost is allocated to each activity based on its…

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 $177 per day Radiology $250 per image Pharmacy $48 per physician order Chemistry lab $87 per test Operating room $860 per operating room hour The activity usage information associated with the two patients is as follows: Cheryl Umit Abel Putin 4 days 10 days 4 images 8 images 5 orders 7 orders 4 tests 2.5 hours Number of days Number of images Number of physician orders Number of tests 7 tests Number of operating room hours 7 hours This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet a. Determine the activity cost associated with each patient. Abel Putin s Cheryl Umit s b. Why is the total activity cost different for the two patients? apparently had a different condition that required more extensive treatment. Thus, the activity cost to is more than the activity cost of the other patient.