rosswinds 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: Activity Activity Rate Room and meals $230 per day Radiology $185 per image Pharmacy $50 per physician order Chemistry lab $90 per test Operating room $1,030 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of days 6 days 3 days Number of images 5 images 3 images Number of physician orders 7 orders 2 orders Number of tests 6 tests 2 tests Number of operating room hours 9 hours 5 hours This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Determine the activity cost associated with each patient. Abel Putin _?_ Cheryl Umit _?_ Why is the total activity cost different for the two patients? _(Abel Putin or Cheryl Umit) apparently had a different condition that required more extensive treatment. Thus, the activity cost to _(Abel Putin or Cheryl Umit) is more than the activity cost of the other patient.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 20E: Activity-based costing for a service company Crosswinds Hospital plans to use activity-based costing...

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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:

Activity		Activity Rate
Room and meals	$230		per day
Radiology	$185		per image
Pharmacy	$50		per physician order
Chemistry lab	$90		per test
Operating room	$1,030		per operating room hour

The activity usage information associated with the two patients is as follows:

	Abel Putin	Cheryl Umit
Number of days	6	days	3	days
Number of images	5	images	3	images
Number of physician orders	7	orders	2	orders
Number of tests	6	tests	2	tests
Number of operating room hours	9	hours	5	hours

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

Determine the activity cost associated with each patient.

Abel Putin ___?___

Cheryl Umit ___?___
Why is the total activity cost different for the two patients?

_____(Abel Putin or Cheryl Umit) apparently had a different condition that required more extensive treatment. Thus, the activity cost to _____(Abel Putin or Cheryl Umit) is more than the activity cost of the other patient.

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