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Activity-Based Costing for a Service Company Crosswinds Hospital plans to use activity-based costing to assign...

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Accounting

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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: Activity Activity Rate Room and meals $204 per day Radiology $288 per image Pharmacy $49 per physician order Chemistry lab $104 per test Operating room $900 per operating room hour The activity usage information associated with the two patients is as follows: Abel Putin Cheryl Umit Number of days 2 days 10 days Number of images 2 images 6 images Number of physician orders 4 orders 6 orders Number of tests 4 tests 7 tests Number of operating room hours 2.5 hours 6 hours a. Determine the activity cost associated with each patient. Abel Putin $ Cheryl Umit b. Why is the total activity cost different for the two patients? apparently had a different condition that required more extensive treatment. Thus, the activity cost to is more than the activity cost of the other patient

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