Question

Print Item ABC, Resource Drivers, Service Industry Glencoe Medical Clinic operates a cardiology care unit and a matermity care unit. Colby Hepworth, the dinic's administrator, is investigating the charges assigned to cardiology patients. Currently, all cardiology patients are charged the same rate per patient broadly defined as occupancy, feeding, and nursing care. A recent study, however, on daily care services vary with the severity of the case being treated. Second, the occupancy activity is a combination of tw monitoring equipment. Since some patients require difference in demands resulting from differences in patient type. Separating the occupancy activity into two determination of the cost of each activity. Determining the costs of the monitoring costs, however, are shared by two activities: lodging cardiology patients and lodging maternity care patients. The total lodging costs for the two activities were $5,918,000 per year and consisted of such items as building depreciation, building maintenance, and building utilities. The cardiology floor and the maternity floor each occupy 18,800 square feet. Hepworth determined that lodging costs would be assigned to each unit based on square feet. day for daily care services, Daily care services are A recent study, however, revealed several interesting outcomes. First, the demands patients place o activities: lodging and use of more monitoring than others, these activities should be separated. Third, the daily rate should reflect the separate activities also required the activity was fairly easy because its costs were directly traceable. Lodai To compute a daily rate that reflected the difference in demands, patients were placed in three categories according to liness severity, and the following annual data were collected: Activity Cost of Activity Activity Driver Quantity 21,490 30,820 21.490 230,300 601,720 Patient days Lodging Monitoring Feeding 2,064,940 Monitoring hours used 451,290an days ,606,000 Nursing hours 7,723,950 Nursing care Total Previous Next Check My Work 3 more Check My Work uses remaining

Answer 1

1. 7,723,950 / 21,490 =           359.42

2. rate 1 - lodging & feeding - 1,053,010                21,490 = 49 per patient day

     rate 2 monitoring - 2,064,940                          30,820 = 67 per monitoring hour used

     rate 3 nursing care - 4,606,000                         230,300 = 20 per nursing hours

3. for severity

           patient days

           monitoring hours

         nursing hours

High				Medium				low
7200	49	352800		10440	49	511560		3850	49	188650
15180	67	1017060		12360	67	828120		3280	67	219760
137600	20	2752000		3280	20	65600		14900	20	298000