Activity-Based Costing for a hospital Deer Lodge Regional Hospital plans to use activity-based costing to...
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Accounting
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
$
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