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Surgery Center is an outpatient surgical clinic that was profitable for many years, but Medicare has cut its reimbursements by as much as 50%. As a result, the clinic wants to better understand its costs, it decides to prepare an activity-based cost analysis, including an estimate of the average cost of both general surgery and orthopedic surgery. The clinic's three activity cost pools and their cost drivers ollow. cost cost Driver Driver Quantity $1,768,eee Professional hours Activity cost Professional salaries Patient services and supplies Buiiding cost 18,488 30,e80 Number of patients 169,480 Square feet 1, 548 The two main surgical units and their related data follow. General surgery 2,790 7,700 920 Orthopedic surgery requires more space for patients, supplies, and equipment. 1. & 2. Compute the cost per cost driver for each of the three activity cost pools. Use the results to allocate costs to both the general surgery and the orthopedic surgery units. Compute total cost and average cost per patient for both the general surgery and the orthopedic surgery units. Answer is complete but not entirely correct. General Surgery Orthopedic Surgery Activity driver Overhead Activity driver Overhead Activity Drivers Activity Rate 7000pprofessional hour .700 459.000 6202140 4204.200 700 1.308.000 92043240 220 24.200 Professional saleries .788.000 10400Professiona hourg services and 7.00per patent 11000per square foot 30.080 Building cost 10,4001 Square feet Total overhead cost Number of pstients Average cost per patient 34 340 1,370.440 40.0

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