Zelman to answer the following questions. Calculate the per unit cost of an initial visit using both the conventional and ABC approaches. Calculate the per unit cost of a regular visit using both the conventional and ABC approaches. Calculate the per unit cost of an intensive visit using both the conventional and ABC approaches. Exhibit 12-14 Basic data and calculation of unit costs using a conventional approach Total Cost by Visit Type Basic Data A B C D Initial Regular Intensive Total (Given) (Given) (Given) (A + B + C) 1 Number of visits 8,000 26,000 8,600 42,600 2 Direct materials (etc.) $40,000 $50,000 $65,000 $155,000 3 Direct labor $100,000 $120,000 $280,000 $500,000 4 Estimated overhead (total is a given) $229,000 5 Cost / visit: conventional method Additional basic data 1) Basic data: annual projections of overhead costs by activity Cost Driver Information Activity I J K Cost Driver Units (Given) (Given) (Gi

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 41E: Examine the graphs in Exercise 3-40. Required: As explained in the chapter, cost behavior patterns...

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Use the information below or using Exhibit 12.14 on page 577 in Zelman to answer the following questions.

Calculate the per unit cost of an initial visit using both the conventional and ABC approaches.
Calculate the per unit cost of a regular visit using both the conventional and ABC approaches.
Calculate the per unit cost of an intensive visit using both the conventional and ABC approaches.

Exhibit 12-14

	Basic data and calculation of unit costs using a conventional approach				Total Cost by Visit Type
				Basic Data
				A		B	C		D
				Initial		Regular	Intensive		Total
				(Given)		(Given)	(Given)		(A + B + C)
		1	Number of visits	8,000		26,000	8,600		42,600
		2	Direct materials (etc.)	$40,000		$50,000	$65,000		$155,000
		3	Direct labor	$100,000		$120,000	$280,000		$500,000
		4	Estimated overhead (total is a given)					$229,000
		5	Cost / visit: conventional method

	Additional basic data		1) Basic data: annual projections of overhead costs by activity
				Cost Driver Information
			Activity	I		J	K
				Cost		Driver	Units
				(Given)		(Given)	(Given)
		6	Intake	$34,000		New visits	3,550	New visits
		7	Medical records	$35,000		Time spent	2,390	Hours
		8	Billing	$65,000		Time spent	5,400	Hours
		9	Other	$95,000		Visits	42,600	Visits
		10	Total	$229,000

		2) Basic data: actual annual operating results of cost drivers to be used to assign ABC overhead cost
				Visit Type
				M		N	O		P
				Initial		Regular	Intensive		Total
				(Given)		(Given)	(Given)		(M + N + O)
		11	New visits	2,500		700	350		3,550
		12	Medical records	600		640	1,150		2,390
		13	Billing	3,200		1,000	1,200		5,400
		14	Other	8,000		26,000	8,600		42,600

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