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
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