To compute a daily rate that reflected the difference in demands, patients were placed in three categories according to illness severity, and the following annual data were collected: Cost of Activity Activity Driver Activity Lodging Monitoring Feeding Nursing care Total The demands associated with patient severity are also provided: Low Severity Patient Days Monitoring Hours Nursing Hours High Medium Rate 1 Rate 2 Rate 3 7,170 10,180 3,680 $546,780 2,132,200 441,630 4,185,700 $7,306,310 High severity Medium severity Low severity Patient days Monitoring hours used Patient days Nursing hours 15,170 Required: 1. Suppose that the costs of daily care are assigned using only patient days as the activity driver (which is also the measure of output). Compute the daily rate using this unit-based approach of cost assignment. If required, round your answer to the nearest cent. $ per day 2. Compute activity rates using the given activity drivers (combine activities with the same driver). If required, round your answers to the nearest cent. per patient day per monitoring hour per hour of nursing care 3. Compute the charge per patient day for each patient type using the activity rates from Requirement 2 and the demands on each activity. Round your interim calculations and final answers to the nearest cent. 12,030 3,260 133,100 72,900 14,300 Quantity 21,030 30,460 21,030 220,300 per patient day per patient day per patient day
To compute a daily rate that reflected the difference in demands, patients were placed in three categories according to illness severity, and the following annual data were collected: Cost of Activity Activity Driver Activity Lodging Monitoring Feeding Nursing care Total The demands associated with patient severity are also provided: Low Severity Patient Days Monitoring Hours Nursing Hours High Medium Rate 1 Rate 2 Rate 3 7,170 10,180 3,680 $546,780 2,132,200 441,630 4,185,700 $7,306,310 High severity Medium severity Low severity Patient days Monitoring hours used Patient days Nursing hours 15,170 Required: 1. Suppose that the costs of daily care are assigned using only patient days as the activity driver (which is also the measure of output). Compute the daily rate using this unit-based approach of cost assignment. If required, round your answer to the nearest cent. $ per day 2. Compute activity rates using the given activity drivers (combine activities with the same driver). If required, round your answers to the nearest cent. per patient day per monitoring hour per hour of nursing care 3. Compute the charge per patient day for each patient type using the activity rates from Requirement 2 and the demands on each activity. Round your interim calculations and final answers to the nearest cent. 12,030 3,260 133,100 72,900 14,300 Quantity 21,030 30,460 21,030 220,300 per patient day per patient day per patient day
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:To compute a daily rate that reflected the difference in demands, patients were placed in three categories according to illness severity, and the following annual data were collected:
Cost of Activity
Activity Driver
$ 546,780
2,132,200
441,630
4,185,700
$7,306,310
Activity
Lodging
Monitoring
Feeding
Nursing care
Total
The demands associated with patient severity are also provided:
Severity Patient Days Monitoring Hours Nursing Hours
High
Medium
Low
7,170
10,180
3,680
$
Patient days
Monitoring hours used
Patient days
Nursing hours
High severity
Medium severity
Low severity
15,170
12,030
3,260
133,100
72,900
14,300
Required:
1. Suppose that the costs of daily care are assigned using only patient days as the activity driver (which is also the measure of output). Compute the daily rate using this unit-based approach of cost assignment. If required, round your answer
to the nearest cent.
per day
2. Compute activity rates using the given activity drivers (combine activities with the same driver). If required, round your answers to the nearest cent.
Rate 1
per patient day
Rate 2
per monitoring hour
Rate 3
per hour of nursing care
3. Compute the charge per patient day for each patient type using the activity rates from Requirement 2 and the demands on each activity. Round your interim calculations and final answers to the nearest cent.
per patient day
per patient day
per patient day
Quantity
21,030
30,460
21,030
220,300
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 1 images
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