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 different condition that required more extensive treatment. Thus, the activity cost to is more than the activity cost of the other patient.
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 different condition that required more extensive treatment. Thus, the activity cost to is more than the activity cost of the other patient.
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 | $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 different condition that required more extensive treatment. Thus, the activity cost to is more than the activity cost of the other patient.
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