Question

Exercise 17-18 Activity-based costing LOP3 Surgery Center is an outpatient surokal droe that was prottable for many years, but Medicare has out as reembursements by as much * As a result the clinic wants to better understand its costit decides to prepare an activity based cost a n ungan state of the average cost of both general surgery and orcode surgery Thenics the cost old the cost Activity cast fool Cost oriver $1,000,000 professional ar t The woman surgical units and the related data todo Othopedic surgery requires more space for patients, supptes, and equipment Recured 1.2. Compute the cost per cost over for each of the three activity cost poots. Use the resuts to allocate costs to both the ceneral surgery and the orthopedic surgery units Compute total cost and average cost per patient for both the general surgery and the hepedi surgery s ound your answers to whole Ovostend Cou

Answer 1

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

G H Answer Activity Overhead Cost Activity Drivers Activity Rate 120 - Professtional salaries Patient services and supplies - Building cost 1008000 16280 80400 8400 Professional hours 440 number of patients 1340 square feet General Surgery Activity Overheads drivers assigned incurred 1700 204000 320 11840 520 31200 247040 320 772 Orthopedic Surgery Activity Overheads drivers assigned incurred 6700 804000 120 4440 820 49200 857640 120 7147 0 2 Note 3 Formula 4 Cost per patient 5 = overheads assigned to repective surgery / number of patients for that surgery 7 Thank You