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: Activity Budgeted Activity Cost Activity Base Scheduling and admitting $432,000              Number of patients Housekeeping 4,212,000              Number of patient days Nursing 5,376,000              Weighted care unit     Total costs $10,020,000                  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:   Activity-Base Usage   Procedure A     Number of patients 280   Average length of stay x 6 days Patient days 1,680 Weighted care units 19,200 Procedure B     Number of patients 650   Average length of stay x 5 days Patient days 3,250 Weighted care units 6,000 Procedure C     Number of patients 1,200   Average length of stay x 4 days Patient days 4,800 Weighted care units 24,000   Private insurance reimburses the hospital for these activities at a fixed daily rate of $406 per patient day for all three procedures. Required: 1.  Determine the activity rates. Activity Activity Rate Scheduling and admitting $fill in the blank 1  per patient Housekeeping $fill in the blank 2  per pd Nursing $fill in the blank 3  per wcu 2.  Determine the activity cost for each procedure. Activity Total Activity Cost by Procedure Procedure A $fill in the blank 4 Procedure B $fill in the blank 5 Procedure C $fill in the blank 6 3. Determine the excess or deficiency of reimbursements to activity cost. Activity Excess (deficiency) of reimbursement over activity cost Procedure A $fill in the blank 7 Procedure B $fill in the blank 8 Procedure C $fill in the blank 9 4. Based on the determination of the excess or deficiency of reimbursement to activity cost, indicate which procedure cost is too high.   Hospital management has decided to further investigate the nursing effort. Determine the weighted care units per patient days for each procedure. Round to one decimal place. Procedure A fill in the blank 11 weighted care units per patient day Procedure B fill in the blank 12 weighted care units per patient day Procedure C fill in the blank 13 weighted care units per patient day

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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:

Activity Budgeted Activity Cost Activity Base
Scheduling and admitting $432,000              Number of patients
Housekeeping 4,212,000              Number of patient days
Nursing 5,376,000              Weighted care unit
    Total costs $10,020,000               

 

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:

  Activity-Base Usage  
Procedure A    
Number of patients 280  
Average length of stay x 6 days
Patient days 1,680
Weighted care units 19,200
Procedure B    
Number of patients 650  
Average length of stay x 5 days
Patient days 3,250
Weighted care units 6,000
Procedure C    
Number of patients 1,200  
Average length of stay x 4 days
Patient days 4,800
Weighted care units 24,000

 

Private insurance reimburses the hospital for these activities at a fixed daily rate of $406 per patient day for all three procedures.

Required:

1.  Determine the activity rates.

Activity Activity Rate
Scheduling and admitting $fill in the blank 1  per patient
Housekeeping $fill in the blank 2  per pd
Nursing $fill in the blank 3  per wcu

2.  Determine the activity cost for each procedure.

Activity Total Activity
Cost by Procedure
Procedure A $fill in the blank 4
Procedure B $fill in the blank 5
Procedure C $fill in the blank 6

3. Determine the excess or deficiency of reimbursements to activity cost.

Activity Excess (deficiency) of
reimbursement over
activity cost
Procedure A $fill in the blank 7
Procedure B $fill in the blank 8
Procedure C $fill in the blank 9

4. Based on the determination of the excess or deficiency of reimbursement to activity cost, indicate which procedure cost is too high.

 

Hospital management has decided to further investigate the nursing effort. Determine the weighted care units per patient days for each procedure. Round to one decimal place.

Procedure A fill in the blank 11 weighted care units per patient day

Procedure B fill in the blank 12 weighted care units per patient day

Procedure C fill in the blank 13 weighted care units per patient day

2. Determine the activity cost for each procedure.
Total Activity
Cost by Procedure
Activity
Procedure A
Procedure B
Procedure C
Activity
Procedure A
3. Determine the excess or deficiency of reimbursements to activity cost.
Excess (deficiency) of
reimbursement over
activity cost
Procedure B
Procedure C
$
Procedure A
X
4. Based on the determination of the excess or deficiency of reimbursement to activity cost, indicate which procedure cost is too high.
Procedure B
Hospital management has decided to further investigate the nursing effort. Determine the weighted care units per patient days for each procedure. Round to one decimal place.
X weighted care units per patient day
X weighted care units per patient day
X weighted care units per patient day
Procedure C
X
Transcribed Image Text:2. Determine the activity cost for each procedure. Total Activity Cost by Procedure Activity Procedure A Procedure B Procedure C Activity Procedure A 3. Determine the excess or deficiency of reimbursements to activity cost. Excess (deficiency) of reimbursement over activity cost Procedure B Procedure C $ Procedure A X 4. Based on the determination of the excess or deficiency of reimbursement to activity cost, indicate which procedure cost is too high. Procedure B Hospital management has decided to further investigate the nursing effort. Determine the weighted care units per patient days for each procedure. Round to one decimal place. X weighted care units per patient day X weighted care units per patient day X weighted care units per patient day Procedure C X
Patient days
Weighted care units
Procedure B
Number of patients
Average length of stay
Patient days
Weighted care units
Procedure C
Number of patients
Average length of stay
Patient days
Weighted care units
1. Determine the activity rates.
Activity
Scheduling and admitting
Housekeeping
1,680
Nursing
19,200
650
x 5 days
3,250
6,000
1,200
Private insurance reimburses the hospital for these activities at a fixed daily rate of $406 per patient day for all three procedures.
Required:
x 4 days
4,800
24,000
Activity Rate
X
X
X
per patient
per pd
per wcu
Transcribed Image Text:Patient days Weighted care units Procedure B Number of patients Average length of stay Patient days Weighted care units Procedure C Number of patients Average length of stay Patient days Weighted care units 1. Determine the activity rates. Activity Scheduling and admitting Housekeeping 1,680 Nursing 19,200 650 x 5 days 3,250 6,000 1,200 Private insurance reimburses the hospital for these activities at a fixed daily rate of $406 per patient day for all three procedures. Required: x 4 days 4,800 24,000 Activity Rate X X X per patient per pd per wcu
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