DBC, TDABC, and ABC The Bienestar Cardiology Clinic has two major activities: diagnostic and treatment. The two activities use four resources: nursing, medical technicians, cardiologists, and equipment. Detailed interviews have provided the following work distribution matrix shown below. Resources Activity Nursing Technicians Cardiologists Equipment Total Activity Time Diagnosing patients 0.70 0.80 0.40 0.60 12,000 hrs. Treating patients 0.30 Total time (hrs.) 0.20 0.60 0.40 8,000 hrs. 4,000 4,000 6,000 6,000 20,000 Cost $80,000 $80,000 $320,000 $320,000 The total time estimated corresponds to practical capacity (interviewers adjusted the total time to about 80 percent of the available time). The equipment time is measured in machine hours. Thus, the total time (at practical capacity) in the system is 20,000 hours. In considering the implementation of a TDABC model, the following unit times and transaction information are also provided: Unit Time Diagnosing patients 3 hrs Treating patients 0.8 hr. Driver Expected Activity Driver Quantity No. of patients 4,000 No. of treatments 10,000 The clinic has identified three types of patients: those with no heart disease, those with mild heart disease, and those with severe heart disease. The following additional data are provided: Average Time Spent Servicing Diagnosing Patients Treating Patients Each Patlent Type (Cycle Time) Patient Type No disease Mild disease 2,000 0 3 hrs. 1,500 5,000 5.6 hrs. Severe disease 500 5,000 11.0 hrs. ? Activity cost ? Required: Required: 1. Calculate the activity costs for diagnosing and treating patients. Using the activity costs calculated, calculate the unit cost of servicing each type of patient using traditional ABC. Activity rates Diagnosing Sfill in the blank 1 Treating Sfill in the blank 2 Calculate the unit cost of servicing each type of patient using traditional ABC. Unit Cost No Disease $fill in the blank 3 Mild $fill in the blank 4 Severe $fill in the blank 5
DBC, TDABC, and ABC The Bienestar Cardiology Clinic has two major activities: diagnostic and treatment. The two activities use four resources: nursing, medical technicians, cardiologists, and equipment. Detailed interviews have provided the following work distribution matrix shown below. Resources Activity Nursing Technicians Cardiologists Equipment Total Activity Time Diagnosing patients 0.70 0.80 0.40 0.60 12,000 hrs. Treating patients 0.30 Total time (hrs.) 0.20 0.60 0.40 8,000 hrs. 4,000 4,000 6,000 6,000 20,000 Cost $80,000 $80,000 $320,000 $320,000 The total time estimated corresponds to practical capacity (interviewers adjusted the total time to about 80 percent of the available time). The equipment time is measured in machine hours. Thus, the total time (at practical capacity) in the system is 20,000 hours. In considering the implementation of a TDABC model, the following unit times and transaction information are also provided: Unit Time Diagnosing patients 3 hrs Treating patients 0.8 hr. Driver Expected Activity Driver Quantity No. of patients 4,000 No. of treatments 10,000 The clinic has identified three types of patients: those with no heart disease, those with mild heart disease, and those with severe heart disease. The following additional data are provided: Average Time Spent Servicing Diagnosing Patients Treating Patients Each Patlent Type (Cycle Time) Patient Type No disease Mild disease 2,000 0 3 hrs. 1,500 5,000 5.6 hrs. Severe disease 500 5,000 11.0 hrs. ? Activity cost ? Required: Required: 1. Calculate the activity costs for diagnosing and treating patients. Using the activity costs calculated, calculate the unit cost of servicing each type of patient using traditional ABC. Activity rates Diagnosing Sfill in the blank 1 Treating Sfill in the blank 2 Calculate the unit cost of servicing each type of patient using traditional ABC. Unit Cost No Disease $fill in the blank 3 Mild $fill in the blank 4 Severe $fill in the blank 5
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter3: Data Visualization
Section: Chapter Questions
Problem 23P: Aurora Radiological Services is a health care clinic that provides radiological imaging services...
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Question
Please explain your answer to the question above, being as specific as possible.
Transcribed Image Text:DBC, TDABC, and ABC
The Bienestar Cardiology Clinic has two major activities: diagnostic and treatment. The two activities use four resources: nursing, medical
technicians, cardiologists, and equipment. Detailed interviews have provided the following work distribution matrix shown below.
Resources
Activity
Nursing
Technicians Cardiologists Equipment
Total Activity
Time
Diagnosing patients 0.70
0.80
0.40
0.60
12,000
hrs.
Treating patients 0.30
Total time (hrs.)
0.20
0.60
0.40
8,000
hrs.
4,000
4,000
6,000
6,000
20,000
Cost
$80,000
$80,000
$320,000
$320,000
The total time estimated corresponds to practical capacity (interviewers adjusted the total time to about 80 percent of the available time). The
equipment time is measured in machine hours. Thus, the total time (at practical capacity) in the system is 20,000 hours. In considering the
implementation of a TDABC model, the following unit times and transaction information are also provided:
Unit Time
Diagnosing patients 3
hrs
Treating patients
0.8
hr.
Driver
Expected Activity
Driver Quantity
No. of patients
4,000
No. of treatments 10,000
The clinic has identified three types of patients: those with no heart disease, those with mild heart disease, and those with severe heart disease.
The following additional data are provided:
Average Time Spent Servicing
Diagnosing Patients Treating Patients Each Patlent Type (Cycle Time)
Patient Type
No disease
Mild disease
2,000
0
3 hrs.
1,500
5,000
5.6 hrs.
Severe disease 500
5,000
11.0 hrs.
?
Activity cost
?
Required:
Transcribed Image Text:Required:
1. Calculate the activity costs for diagnosing and treating patients. Using the activity costs calculated, calculate the unit cost of servicing each type
of patient using traditional ABC.
Activity rates
Diagnosing Sfill in the blank 1
Treating
Sfill in the blank 2
Calculate the unit cost of servicing each type of patient using traditional ABC.
Unit Cost
No Disease $fill in the blank 3
Mild
$fill in the blank 4
Severe
$fill in the blank 5
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