Determine the activity cost associated with each patient

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Problem - 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

$240

per day

Radiology

$215

per image

Pharmacy

$50

per physician order

Chemistry lab

$80

per test

Operating room

$1,000

per operating room hour

The activity usage information associated with the two patients is as follows:

 

Abel Putin

Cheryl Umit

Number of days

6 days

4 days

Number of images

4 images

3 images

Number of physician orders

6 orders

2 orders

Number of tests

5 tests

4 tests

Number of operating room hours

8 hours

4 hours

Required -

a. Determine the activity cost associated with each patient.

b. Why is the total activity cost different for the two patients?

Reference no: EM132715348

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