Financial & Managerial Accounting
14th Edition
ISBN: 9781337119207
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 18, Problem 4ADM
A.
To determine
Activity-based costing (ABC) method: The costing method which allocates
To compute: The activity-cost per patient for a bypass treatment.
B.
To determine
To compute: The revised activity-cost per patient for a bypass treatment, and indicate whether the revised cost has improved or not
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tests
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Abel Putin
$fill in the blank 1
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$fill in the blank 2
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apparently had a…
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per test
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Abel Putin
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days
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Activity-Based Costing for a Service Company
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per image
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Chemistry lab
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Number of days
Number of images
Number of physician orders
Number of tests
Abel Putin
LA
Abel Putin
atient.
3 days
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7 orders
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Chapter 18 Solutions
Financial & Managerial Accounting
Ch. 18 - Why would management be concerned about the...Ch. 18 - Why would a manufacturing company with multiple...Ch. 18 - How do the multiple production department and the...Ch. 18 - Under what two conditions would the multiple...Ch. 18 - Prob. 5DQCh. 18 - Prob. 6DQCh. 18 - Prob. 7DQCh. 18 - Under what circumstances might the activity-based...Ch. 18 - Prob. 9DQCh. 18 - Prob. 10DQ
Ch. 18 - Single plantwide factory overhead rate The total...Ch. 18 - Multiple production department factory overhead...Ch. 18 - Activity-based costing: factory overhead costs The...Ch. 18 - Activity-based costing: selling and administrative...Ch. 18 - Activity-based costing for a service business...Ch. 18 - Single plantwide factory overhead rate Nixon...Ch. 18 - Single plantwide factory overhead rate Mozart...Ch. 18 - Single plantwide factory overhead rate Sally...Ch. 18 - Product costs and product profitability reports,...Ch. 18 - Multiple production department factory overhead...Ch. 18 - Single plantwide and multiple production...Ch. 18 - Single plantwide and multiple production...Ch. 18 - Identifying activity bases in an activity-based...Ch. 18 - Product costs using activity rates Nozama.com Inc....Ch. 18 - Product costs using activity rates Atlas...Ch. 18 - Activity rates and product costs using...Ch. 18 - Activity cost pools, activity rates, and product...Ch. 18 - Activity-based costing and product cost distortion...Ch. 18 - Multiple production department factory overhead...Ch. 18 - Activity-based costing and product cost distortion...Ch. 18 - Single plantwide rate and activity-based costing...Ch. 18 - Evaluating selling and administrative cost...Ch. 18 - Construct and interpret a product profitability...Ch. 18 - Activity-based costing and customer profitability...Ch. 18 - Activity-based costing for a service company...Ch. 18 - Activity-based costing for a service company...Ch. 18 - Single plantwide factory overhead rate Orange...Ch. 18 - Multiple production department factory overhead...Ch. 18 - Activity-based and department rate product costing...Ch. 18 - Activity-based product costing Mello Manufacturing...Ch. 18 - Allocating selling and administrative expenses...Ch. 18 - Product costing and decision analysis for a...Ch. 18 - Single plantwide factory overhead rate Spoiled Cow...Ch. 18 - Multiple production department factory overhead...Ch. 18 - Activity-based department rate product costing and...Ch. 18 - Activity-based product costing Sweet Sugar Company...Ch. 18 - Allocating selling and administrative expenses...Ch. 18 - Product costing and decision analysis for a...Ch. 18 - Activity-based product cost improvement Gourmet...Ch. 18 - Prob. 2ADMCh. 18 - Production run size and activity improvement...Ch. 18 - Prob. 4ADMCh. 18 - Ethics in Action The controller of Tri Con Global...Ch. 18 - Communication The controller of New Wave Sounds...
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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: The activity usage information associated with the two patients is as follows: Determine the activity cost associated with each patient. Why is the total activity cost different for the two patients?arrow_forwardFormation of an Activity Dictionary A hospital is in the process of implementing an ABC system. A pilot study is being done to assess the effects of the costing changes on specific products. Of particular interest is the cost of caring for patients who receive in-patient recovery treatment for illness, surgery (noncardiac), and injury. These patients are housed on the third and fourth floors of the hospital. The floors are dedicated to patient care and have only nursing stations and patient rooms. A partial transcript of an interview with the hospitals nursing supervisor is as follows: 1. How many nurses are in the hospital? There are 101 nurses, including me. 2. Of these 100 nurses, how many are assigned to the third and fourth floors? Fifty nurses are assigned to these two floors. 3. What do these nurses do (please describe)? Provide nursing care for patients, which, as you know, means answering questions, changing bandages, administering medicine, changing clothes, etc. 4. And what do you do? I supervise and coordinate all the nursing activity in the hospital. This includes surgery, maternity, the emergency room, and the two floors you mentioned. 5. What other lodging and care activities are done for the third and fourth floors by persons other than the nurses? The patients must be fed. The hospital cafeteria delivers meals. The laundry department picks up dirty clothing and bedding once each shift. The floors also have a physical therapist assigned to provide care on a physician-directed basis. 6. Do patients use any equipment? Yes. Mostly monitoring equipment. 7. Who or what uses the activity output? Patients. But there are different kinds of patients. On these two floors, we classify patients into three categories according to severity: intensive care, intermediate care, and normal care. The more severe the illness, the more activity is used. Nurses spend much more time with intermediate care patients than with normal care. The more severe patients tend to use more of the laundry service as well. Their clothing and bedding need to be changed more frequently. On the other hand, severe patients use less food. They eat fewer meals. Typically, we measure each patient type by the number of days of hospital stay. And you have to realize that the same patient contributes to each type of product. Required: Prepare an activity dictionary with three categories: activity name, activity description, and activity driver.arrow_forwardProduct costing and decision analysis for a service company Pleasant Stay Medical Inc. wishes to determine its product costs. Pleasant Stay offers a variety of medical procedures (operations) that are considered its products. The overhead has been separated into three major activities. The annual estimated activity costs and activity bases follow: Total patient days are determined by multiplying the number of patients by the average length of stay in the hospital. A weighted care unit (wcu) is a measure of nursing effort used to care for patients. There were 192,000 weighted care units estimated for the year. In addition, Pleasant Stay estimated 6,000 patients and 27,000 patient days for the year. (The average patient is expected to have a a little more than a four-day stay in the hospital.) During a portion of the year, Pleasant Stay collected patient information for three selected procedures, as follows: Private insurance reimburses the hospital for these activities at a fixed daily rate of 406 per patient day for all three procedures. Instructions Determine the activity rates. Determine the activity cost for each procedure. Determine the excess or deficiency of reimbursements to activity cost. Interpret your results.arrow_forward
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- Northwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics.Required:For each cost incurred at Northwest Hospital, indicate whether it would most likely be a direct cost or an indirect cost of the specified cost object by placing an X in the appropriate column.arrow_forwardSuppose that a surgical ward has gathered the following information for four nursing activities and two types of patients: Treating patients Providing hygienic care Responding to requests Monitoring patients Required: Normal Intensive Driver Normal Treatments Intensive Hygienic hours Requests Monitoring hours Patient Category Normal Intensive 7,900 1. Determine the total nursing costs assigned to each patient category. Costs Assigned per patient day per patient day 4,800 32,000 6,000 8,000 19,100 80,000 72,000 Activity Rate $4.00 5.00 2. Output is measured in patient days. Assuming that the normal patient category uses 8,000 patient days and the intensive patient category uses 6,400 patient days, calculate the nursing cost per patient day for each type of patient. Round your answers to the nearest cent. 2.00 3.00arrow_forwardWhich of the following activity bases would be the most appropriate for food costs of a hospital? a.quantity of prescriptions filled b.how many MRI's are taken c.number of nurses scheduled to work d.number of patients who stay in the hospitalarrow_forward
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