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

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Accounting

Activity-Based Costing for a Service Company Crosswinds Hospitalplans to use activity-based costing to assign hospital indirectcosts to the care of patients. The hospital has identified thefollowing activities and activity rates for the hospital indirectcosts: Activity Activity Rate Room and meals $237 per day Radiology$334 per image Pharmacy $53 per physician order Chemistry lab $90per test Operating room $740 per operating room hour The activityusage information associated with the two patients is as follows:Abel Putin Cheryl Umit Number of days 3 days 11 days Number ofimages 4 images 5 images Number of physician orders 6 orders 8orders Number of tests 3 tests 6 tests Number of operating roomhours 4 hours 7 hours a. Determine the activity cost associatedwith each patient.

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please find below solution..

Given that-
Rate Room and meals $237 per day
Radiology 334 per image
Pharmacy 53 per physician order
Chemistry lab 90 per test
Operating room 740 per operating room hour
Patient -1 Patient -2
number of days 3 11
Number of image 4 5
Number of physician orders 6 8
Number of tests 3 6
Number of operating room hours 4 7
Computation of activity cost Patient -1 rate activity cost
Rate Room and meals number of days 3 $237 $711
Radiology Number of image 4 $334 $1,336
Pharmacy Number of physician orders 6 $53 $318
Chemistry lab Number of tests 3 $90 $270
Operating room Number of operating room hours 4 $740 $2,960
total cost $5,595
Computation of activity cost Patient -2 rate activity cost
Rate Room and meals number of days 11 $237 $2,607
Radiology Number of image 5 $334 $1,670
Pharmacy Number of physician orders 8 $53 $424
Chemistry lab Number of tests 6 $90 $540
Operating room Number of operating room hours 7 $740 $5,180
total cost $10,421

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