Pleasant Stay Medical Inc. wishes to determine its product costs. Pleasant Stay offers a variety
of medical procedures operations that are considered its "products." The overhead has been
separated into three major activities. The annual estimated activity costs and activity bases follow:
Total "patient days" are determined by multiplying the number of patients by the average length
of stay in the hospital. A weighted care unit wcu is a measure of nursing effort used to care for
patients. There were weighted care units estimated for the year. In addition, Pleasant Stay
estimated patients and patient days for the year. The average patient is expected to
have a a little more than a fourday stay in the hospital.
During a portion of the year, Pleasant Stay collected patient information for three selected pro
cedures, as follows:
Private insurance reimburses the hospital for these activities at a fixed daily rate of $ per
patient day for all three procedures.
Instructions
Determine the activity rates.
Determine the activity cost for each procedure.
Determine the excess or deficiency of reimbursements to activity cost.
