Activity-Based Product CostingSuppose that a surgical ward has gathered the following information for four nursing activities and two types of patients:Patient CategoryDriverNormal IntensiveActivity RateTreating patientsTreatments6,9008,000$4.00Providing hygienic careHygienic hours6,30018,1005.00Responding to requestsRequests32,00080,0002.00Monitoring patientsMonitoring hours6,00072,0003.00Required:1. Determine the total nursing costs assigned to each patient category.NormalIntensiveCosts Assigned$ 141,100498,5002. Output is measured in patient days. Assuming that the normal patient category uses 8,000 patient days and the intensive patient category uses 6,400 patient days, calculatethe nursing cost per patient day for each type of patient. Round your answers to the nearest cent.NormalIntensive17.64 per patient day77.95 X per patient day3. Conceptual Connection: The supervisor of the surgical ward has suggested that patient days is the only driver needed to assign nursing costs to each type of patient. Calculatethe charge per patient day using this approach. Round your answer to the nearest cent.44.44 X per patient day

1.The total nursing costs assigned to each patient category. Patient CategoryActivity Ratetotal cost…

Answered: Activity-Based Product Costing Suppose…

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Activity-Based Costing

Section: Chapter Questions

Problem 4ADM

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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: The activity usage information associated with the two patients is as follows: Determine the activity cost associated with each patient. Why is the total activity cost different for the two patients?
Suppose that a surgical ward has gathered the following information for four nursing activities and two types of patients: Treating patients Providing hygienic care Responding to requests Monitoring patients Required: Normal Intensive Driver Normal Treatments Intensive Hygienic hours Requests Monitoring hours Patient Category Normal Intensive 7,900 1. Determine the total nursing costs assigned to each patient category. Costs Assigned per patient day per patient day 4,800 32,000 6,000 8,000 19,100 80,000 72,000 Activity Rate $4.00 5.00 2. Output is measured in patient days. Assuming that the normal patient category uses 8,000 patient days and the intensive patient category uses 6,400 patient days, calculate the nursing cost per patient day for each type of patient. Round your answers to the nearest cent. 2.00 3.00
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 $176 per day Radiology $248 per image Pharmacy $38 per physician order Chemistry lab $96 per test Operating room $760 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of days 5 days 11 days Number of images 4 images 5 images Number of physician orders 7 orders 9 orders Number of tests 2 tests 5 tests Number of operating room hours 3 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 b. Why is the total activity cost different for the two patients? apparently had a…
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 $175 per day Radiology $247 per image Pharmacy $49 per physician order Chemistry lab $104 per test Operating room $720 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of days 6 days 11 days Number of images 3 images 7 images Number of physician orders 5 orders 7 orders Number of tests 2 tests 5 tests Number of operating room hours 4 hours 7 hours a. Determine the activity cost associated with each patient. Abel Putin $fill in the blank 1 Cheryl Umit $fill in the blank 2
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 $274 per day $386 per image $61 per physician order $108 per test $940 per operating room hour The activity usage information associated with the two patients is as follows: Room and meals Radiology Pharmacy Chemistry lab Operating room Number of days Number of images Number of physician orders Number of tests Abel Putin LA Abel Putin atient. 3 days 5 images 7 orders Number of operating room hours a. Determine the activity cost associated with each patient. LA 2 tests Cheryl Umi 9 days 6 images 9 orders 4.5 hours 5 tests 6.5 hours Cheryl Umit p. Why is the total activity cost different for the two patients? apparently had a different condition that equired more extensive treatment. Thus, the activity…
Identifying Direct and Indirect Costs Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics. Required: For each cost incurred at Northwest Hospital, indicate whether it would most likely be a direct cost or an indirect cost of the specified cost object by placing an
Pareto chart and cost of quality report for a service company The administrator of Liberty Hospital has been asked to perform an activity analysis of the emergency room (ER). The ER activities include cost of quality and other patient care activities. The lab tests and transportation are hospital services external to the ER for determining external failure costs. The result of the activity analysis is summarized as follows: Activities Activity Cost Patient registration $ 6,500 Verifying patient information 9,700 Assigning patients 13,000 Searching/waiting for doctor 9,200 Doctor exam 4,900 Waiting for transport 17,500 Transporting patients 16,200 Verifying lab orders 14,500 Searching for equipment 8,200 Incorrect labs 11,300 Lab tests 17,000 Counting supplies 19,000 Looking for supplies 8,200 Staff training 4,800 Total $160,000 a. b. c. d. Classify the…
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Assume that the hospital uses the direct method for cost allocation Question: how to solve question a & b ?
ces Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Supplies Service General surgery Orthopedic surgery Patient services Building cost The two main surgical units and their actual activity usage follow. Actual Activity Usage Square Feet 750 Activity Budgeted Cost $ Supplies Patient services Building cost 2,700,000 30,000 368,000 Surgical Hours 2,800 12, 200 Supplies Patient services Building cost Activity Cost Driver Surgical hours (SH) Number of Orthopedic Surgery Supplies Patient services Building cost patients Square feet Patients 300 1. Compute activity rates using activity-based costing. Budgeted Cost 100 Required: 1. Compute activity rates using activity-based costing. 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit. 1,550 Budgeted Activity Usage 15,000 400 2,300 Budgeted Activity Usage 2.…
Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Budgeted Activity Activity Supplies Patient services Activity Cost Driver Surgical hours (SH) Number of patients Square feet Building cost The two main surgical units and their actual activity usage follow. Actual Activity Usage Budgeted Cost $ 2,310,000 39,000 294,000 Service General surgery Orthopedic surgery Surgical Hours 2,600 8,400 Patients 300 200 Square Feet 720 1,380 Usage 11,000 500 2,100 Required: 1. Compute activity rates using activity-based costing. 2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit.

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