Question

Activity-Based Costing for a hospital

Deer Lodge Regional 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	$191	per day
Radiology	$269	per image
Pharmacy	$48	per physician order
Chemistry lab	$87	per test
Operating room	$820	per operating room hour

The records of two representative patients were analyzed, using the activity rates. The activity information associated with the two patients is as follows:

	Patient Franklin		Patient Kramer
Number of days	4	days	8	days
Number of images	2	images	7	images
Number of physician orders	4	orders	6	orders
Number of tests	5	tests	8	tests
Number of operating room hours	4.5	hours	7	hours

Determine the activity cost associated with each patient.

	Activity Cost
Patient Franklin	$
Patient Kramer	$

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanaton and format. For detailed answer refer to the supporting sheet.

Answer In the given question, we have to calculate the cost associated with each Patient Patient Frankfin Associated Cost Activity Activity Rate Activity (activity rate * activity cost) Rooms and Meal 191 Per day 764 Radiology 269 Per image 538 Pharmacy 48 Per physician order 192 Chemistry Lab 87 Per test 435 Operating Room 820 Per operating room hour 3690 Total assigned cost 5619 Patient Kramer Associated Cost Activity (activity rate * activity cost) 1528 1883 288 696 5740 10135 Thus the final answer Assigned cost Patient Frankfin - Patient Kramer 5619 10135 For any help please comment in the comment box Thank You