1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Volgvan
3 years ago
14

Surgery Center is an outpatient surgical clinic that was profitable for many years, but Medicare has cut its reimbursements by a

s much as 30%. As a result, the clinic wants to better understand its costs. It decides to prepare an activity-based cost analysis, including an estimate of the average cost of both general surgery and orthopedic surgery. The clinic’s three activity cost pools and their cost drivers follow.
Activity Cost Pool Cost Cost Driver Driver Quantity
Professional salaries . 2,520,000 Professional hours 12,000
Patient services and supplies 44,000 Number of patients 800
Building cost 255,000 Square feet 1,700
The two main surgical units and their related data follow.
Service Hours Square Feet Patients
General surgery 3,500 700 500
Orthopedic surgery 8,500 1,000 300
Orthopedic surgery requires more space for patients, supplies, and equipment.
Required:
1.&2.
Compute the cost per cost driver for each of the three activity cost pools. Use the results to allocate costs to both the general surgery and the orthopedic surgery units. Compute total cost and average cost per patient for both the general surgery and the orthopedic surgery units.
Business
1 answer:
7nadin3 [17]3 years ago
8 0

Answer:

The total Costs allocated to General surgery is $ 867500.

The total Costs allocated to  Orthopedic surgery is  $1951500.

Average Cost per patient of General surgery= $1735

Average Cost per patient of Orthopedic surgery= $6505

Explanation:

Surgery Center

Activity Cost Pool              Cost         Cost Driver         Driver Quantity

Professional Salaries  2,520,000    Professional hours       12,000

Patient Ser. & Supplies 44,000        Number of patients        800

Building cost             255,000             Square feet                 1,700

                       Service Hours       Square Feet          Patients

General surgery 3,500                    700                         500

Orthopedic surgery 8,500            1,000                         300

Cost Per Cost Driver

Professional Salaries/  Professional hours =2,520,000 /12,000=210

Patient Ser. & Supplies/ Number of patients  = 44,000  /800= 55

Building cost / Square feet  =255,000 /1700= 150

We apply the rates to both the surgeries to get the costs.

Total Costs

                      Service Hours       Square Feet          Patients        Total

General surgery 3,500*210                700*150             500*55

Costs  $           735000                   105000              27500      867500                    

Orthopedic surgery 8,500*210           1,000*150             300*55

 Costs      $         1785000             150,000               16500     1951500

The total Costs allocated to General surgery is $ 867500.

The total Costs allocated to  Orthopedic surgery is  $1951500.

Total No of Patients = 800

Total Costs = $ 2819,000

We find the average by dividing the total cost by the number of the patients.

Average Cost Rate per patient = 2819,000/800=  3523.75

Average Cost per patient of General surgery= 867500/500= $1735

Average Cost per patient of Orthopedic surgery=1951500/300= $6505

You might be interested in
An insurance policy written after 1988 that fails to pass the seven-pay test is known as
Zigmanuir [339]
The answer to this question is a modified endowment contract. A modified endowment contract or MEC is a type of life insurance policy where in the policy/ insurance is being funded with more money or the insurance premium payment exceeds the amount allowed under the federal law. The modified endowment contracts are taxable.
3 0
3 years ago
Many phone fraud scammers are especially cunning because they approach the target to try to sell _____.
MrMuchimi

Answer: A. improved computer security programs

Lots of people lose money due to phone fraud scammers. They try to approach the target to sell improved computer security programs. They do lots of ways to convince you to the point of asking you to give personal information. If you happen to meet one, say no.


7 0
3 years ago
Read 2 more answers
The Duerr Company manufactures a single product. All raw materials used are traceable to specific units of product. Current info
Gemiola [76]

Answer:

Direct material used= $102,000

Cost of goods manufactured= $327,000

COGS= $347,000

Explanation:

<u>First, we need to calculate the cost of direct material used:</u>

Direct material used= beginning inventory + purchases - ending inventory

Direct material used= 28,000 + 105,000 - 31,000

Direct material used= $102,000

<u>Now, the cost of goods manufactured:</u>

cost of goods manufactured= beginning WIP + direct materials used + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 40,000 + 102,000 + 130,000 + 105,000 - 50,000

cost of goods manufactured= $327,000

<u>Finally, the cost of goods sold:</u>

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 80,000 + 327,000 - 60,000

COGS= $347,000

6 0
3 years ago
Tempo Corp. will issue preferred stock to finance a new artillery line. The firm's existing preferred stock pays a dividend of $
Len [333]

Answer:<u> </u><u><em>Relevant cost of new preferred stock = 10.53%</em></u>

Explanation:

Given:

Dividend = $4.00 per share

Selling for = $40 per share.

Flotation costs =  5% of the selling price.

Marginal tax rate is 30%.

We can compute the cost of new preferred stocks using the following formula:

Relevant\ cost\ of\ new\ preferred\ stock =\frac{ Dividend}{Current\ price\ after\ flotation\ Cost}

Relevant\ cost\ of\ new\ preferred\ stock =\frac{4}{40-(0.05\times40)}

∴ Relevant cost of new preferred stock = 10.53%

Therefore, the correct option is (d)

6 0
3 years ago
What is the most important about the Finance Manager of an agency?
Archy [21]

Often, controllers oversee the accounting, audit, and budget departments. Treasurers and finance officers direct their organization's budgets to meet its financial goals. They oversee the investment of funds. They carry out strategies to raise capital (such as issuing stocks or bonds) to support the firm's expansion.


i hope this helps you out!!!!

3 0
3 years ago
Other questions:
  • The last in line for the payment of profits are the:_______ a) boundholders b) common stockholders c) preferred stockholders d)
    10·1 answer
  • The tools, skills, organization, and knowledge used to extract energy from nature are the
    8·1 answer
  • Materials must have which two qualities in order to be classified as direct materials? a.They must be an integral part of the fi
    9·1 answer
  • The economic cost nationwide of alcohol-related motor vehicle crashes annually is almost __________ billion dollars.
    6·2 answers
  • Sandra Stone, Vice President of International Operations for Global Apparel Corporation, was working with her subordinate, Pete
    9·1 answer
  • Treasury bonds have what maturity date?
    5·2 answers
  • Suppose that the price of a pound of bananas is
    11·1 answer
  • Millie is a buyer who has given her agent an earnest money check for $10,000 with an offer to purchase. when will the check be d
    7·1 answer
  • you invest $15,000 at an annual rate of 8.25or one year. what is the difference in interest earned if your investment is compoun
    5·1 answer
  • In a dbr​ system, the mechanism that controls the rate at which the bottleneck dictates the throughput of the entire plant is ca
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!