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Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Supplies Patient services Budgeted Cost Activity Cost Driver $ 2,040,000 Surgical hours (SH) Number of patients Square feet Building cost The two main surgical units and their actual activity usage follow. Service General surgery Orthopedic surgery 36,000 372,000 Activity Actual Activity Usage Supplies Patient services Building cost Surgical Hours 2,900 7,100 Patients 300 100 1. Compute activity rates using activity-based costing. Budgeted Cost Square Feet 720 1,680 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. Budgeted Activity Usage 10,000 400 2,400 Budgeted Activity Usage Activity Rate

Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Supplies Patient services Budgeted Cost Activity Cost Driver $ 2,040,000 Surgical hours (SH) Number of patients Square feet Building cost The two main surgical units and their actual activity usage follow. Service General surgery Orthopedic surgery 36,000 372,000 Activity Actual Activity Usage Supplies Patient services Building cost Surgical Hours 2,900 7,100 Patients 300 100 1. Compute activity rates using activity-based costing. Budgeted Cost Square Feet 720 1,680 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. Budgeted Activity Usage 10,000 400 2,400 Budgeted Activity Usage Activity Rate

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Supplies Budgeted Cost Activity Cost Driver $ 2,040,000 Surgical hours (SH) 36,000 Number of patients 372,000 Square feet Patient services Building cost The two main surgical units and their actual activity usage follow. Actual Activity Usage Patients 300 100 Service General surgery Orthopedic surgery Surgical Hours 2,900 7,100 Supplies Patient services Building cost 1. Compute activity rates using activity-based costing. Activity Budgeted Cost Square Feet 720 1,680 Budgeted Activity 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. Usage 10,000 400 2,400 Budgeted Activity Usage Activity Rate
Transcribed Image Text:Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Supplies Budgeted Cost Activity Cost Driver $ 2,040,000 Surgical hours (SH) 36,000 Number of patients 372,000 Square feet Patient services Building cost The two main surgical units and their actual activity usage follow. Actual Activity Usage Patients 300 100 Service General surgery Orthopedic surgery Surgical Hours 2,900 7,100 Supplies Patient services Building cost 1. Compute activity rates using activity-based costing. Activity Budgeted Cost Square Feet 720 1,680 Budgeted Activity 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. Usage 10,000 400 2,400 Budgeted Activity Usage Activity Rate
2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit. General surgery Supplies Patient services Building cost Orthopedic Surgery Supplies Patient services Building cost -----Activity Usage----- Overhead cost per patient -----Activity Usage----- -----Activity rate----- -----Activity rate----- Allocated Cost Allocated Cost
Transcribed Image Text:2. Allocate overhead cost to the general surgery and to the orthopedic surgery units. Compute overhead cost per patient for each surgery unit. General surgery Supplies Patient services Building cost Orthopedic Surgery Supplies Patient services Building cost -----Activity Usage----- Overhead cost per patient -----Activity Usage----- -----Activity rate----- -----Activity rate----- Allocated Cost Allocated Cost
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