Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Supplies Patient services Building cost Budgeted Activity Budgeted Cost $ 2,625,000 32,000 390,000 Activity Cost Driver Surgical hours (SH) Number of patients Square feet Usage 15,000 400 3,900 The two main surgical units and their actual activity usage follow. Actual Activity Usage Surgical Service Hours Patients Square Feet General surgery 4,400 300 Orthopedic surgery 10,600 100 910 2,990 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. Compute activity rates using activity-based costing. Activity Supplies Budgeted Cost Budgeted Activity Usage Activity Rate Patient services Building cost 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 Activity Usage----- -----Activity rate----- Allocated Cost Supplies Patient services Building cost Orthopedic Surgery Supplies Patient services Building cost Overhead cost per patient ----Activity Usage----- -----Activity rate----- Allocated Cost 0 0 0
Optimal Health is an outpatient surgical clinic. The clinic's three activities, their overhead cost, and their cost drivers follow. Activity Supplies Patient services Building cost Budgeted Activity Budgeted Cost $ 2,625,000 32,000 390,000 Activity Cost Driver Surgical hours (SH) Number of patients Square feet Usage 15,000 400 3,900 The two main surgical units and their actual activity usage follow. Actual Activity Usage Surgical Service Hours Patients Square Feet General surgery 4,400 300 Orthopedic surgery 10,600 100 910 2,990 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. Compute activity rates using activity-based costing. Activity Supplies Budgeted Cost Budgeted Activity Usage Activity Rate Patient services Building cost 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 Activity Usage----- -----Activity rate----- Allocated Cost Supplies Patient services Building cost Orthopedic Surgery Supplies Patient services Building cost Overhead cost per patient ----Activity Usage----- -----Activity rate----- Allocated Cost 0 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
rrrrrrrrr
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
Patient services
Building cost
Budgeted Activity
Budgeted Cost
$ 2,625,000
32,000
390,000
Activity Cost Driver
Surgical hours (SH)
Number of patients
Square feet
Usage
15,000
400
3,900
The two main surgical units and their actual activity usage follow.
Actual Activity Usage
Surgical
Service
Hours
General surgery
4,400
Patients
300
Square Feet
Orthopedic surgery
10,600
100
910
2,990
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. Compute activity rates using activity-based costing.
Activity
Supplies
Budgeted Cost
Budgeted Activity Usage
Activity Rate
Patient services
Building cost
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
-----Activity Usage-----
-----Activity rate-----
Allocated Cost
Supplies
Patient services
Building cost
Orthopedic Surgery
Supplies
Patient services
Building cost
Overhead cost per patient
-----Activity Usage-----
-----Activity rate-----
Allocated Cost
0
0
0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education