After having shared the results of your calculations with the department management, you have been informed...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
After having shared the results of your calculations with the department management, you have been informed that the department has idle (free, unused) surgery capacity The total capacity supplied is actually 250,000 surgery minutes. This amount has been already included into the prepared estimate of the time used by doctors b) c) d) Does this piece of information have any impact on your calculations in part a)? Explain in great detail. You suggest using an ABC model (that is, model 3) as a basis for the price offer to Helse Nord RHF for the two patient groups A and B. However, hospital's Chief Financial Officer strongly disagrees with you. She claims that it is rather ridiculous to price the groups so high when there is idle capacity for more operations. As she has put it herself, "This represents a sunk cost- why should we charge a higher price for using idle surgery capacity ?" e) Estimate the costs per patient for the two patient groups providing that the information about the idle capacity is taken into account. Discuss this problem statement 3 in great detail. Identify at least four general advantages that are associated with activity -based costing. After having shared the results of your calculations with the department management, you have been informed that the department has idle (free, unused) surgery capacity The total capacity supplied is actually 250,000 surgery minutes. This amount has been already included into the prepared estimate of the time used by doctors b) c) d) Does this piece of information have any impact on your calculations in part a)? Explain in great detail. You suggest using an ABC model (that is, model 3) as a basis for the price offer to Helse Nord RHF for the two patient groups A and B. However, hospital's Chief Financial Officer strongly disagrees with you. She claims that it is rather ridiculous to price the groups so high when there is idle capacity for more operations. As she has put it herself, "This represents a sunk cost- why should we charge a higher price for using idle surgery capacity ?" e) Estimate the costs per patient for the two patient groups providing that the information about the idle capacity is taken into account. Discuss this problem statement 3 in great detail. Identify at least four general advantages that are associated with activity -based costing.
Expert Answer:
Answer rating: 100% (QA)
b The information about the idle surgery capacity does have an impact on the calculations in part a In part a the calculations were based on the assumption that the total capacity supplied is 200000 s... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1119048541
11th Canadian edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
Posted Date:
Students also viewed these accounting questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
A 1.0 m long metallic rod is rotated with an angular frequency of 400 rad s about an axis normal to the rod passing through its one end. The other end of the rod is in contact with a circular...
-
A solenoidal coil with 25 turns of wire is wound tightly around another coil with 300 turns (see fuample 30.1). The inner solenoid is 25.0 cm long and has a diameter of 2.00 cm. At a certain time,...
-
Reconsider the model for the aircraft fastener data from Problem 13.3, part a. Construct plots of the deviance residuals from the model and comment on these plots. Does the model appear satisfactory...
-
Place the corresponding letter of the definition next to the term. a. An organization that stands as a separate economic unit must not have its financial affairs confused with that of other entities....
-
1. A patent increases the incentive to develop new products because it ________ the price of the product and thus generates profit to cover a firms costs of _______. 2. In some cases, a patent is...
-
Investment pays $125 at the beginning of every 6-month period for the next 10 years (a total of 20 payments). Assuming interest rate is 10% Show this what values go for N, I/Y, PV, PMT in the...
-
Using Rhodes Corporation's financial statements (shown below), answer the following questions. a. What is the net operating profit after taxes (NOPAT) for 2012? b. What are the amounts of net...
-
Eyes R Us makes and sells eyeglasses for the consumer market. The three main products are reading glasses, opera glasses, and sunglasses. Each product is manufactured in the company's two...
-
S usan and Bob are married and have two children. To ensure the lifestyle they want for their family, both Susan and Bob work more than forty hours per week. Though Bob tries to do his share of...
-
You present a poster at a local professional meeting and are disappointed when know one stops to view your poster or discuss the results. The presentation covers the entire 4' x 8' board with...
-
Seema is the HR manager in a reputed family-owned firm. There is an opening for a sales executive for handling high-value business accounts for the company. Seema has been working on this position...
-
According to Basso, joking works by taking something that is based at least in part in truth or a "primary text" and puts it in a joking frame where it becomes a "secondary text" a parody of itself....
-
How to calculate the EVA, with the tax cost of capital is 10%? Income Statement for Year Ending December 31, 2019 Sales Operating costs excluding depreciation and amortization EBITDA Depreciation and...
-
Choose five countries and their exchange rates. US dollar price in terms of domestic currency Choose 1 product (or service) that is marketed in each of those 5 countries, and is produced or created...
-
The registrar of a college with a population of N = 4,000 full-time students is asked by the president to conduct a survey to measure satisfaction with the quality of life on campus. The following...
-
Lupasco Ltd. had the following 2017 income statement data: Revenues ....................... $ 100,000 Expenses ........................... 60,000 ..................................... $ 40,000 In...
-
Riley Inc. reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes: The tax rates listed were all enacted by the beginning of 2015. Riley reports under...
-
Refer to BE16-12. Assume that Bantry Capital Ltd. follows ASPE and valued the debt component of the instruments first, applying the residual to the equity component. On a date when the bonds had a...
-
In the freight car system shown in Fig. 6.14, the first car acquires a velocity of \(\dot{x}_{0}\) due to an impact. Find the resulting free vibration of the system. Assume \(m_{i}=m(i=1,2,3)\) and...
-
Consider the free-vibration equations of an undamped two-degree-of-freedom system: \[[m] \ddot{\vec{x}}+[k] \vec{x}=\overrightarrow{0}\] with \[[m]=\left[\begin{array}{ll}1 & 0 \\0 & 4\end{array}...
-
Using the results of Problems 6.24 and 6.56, determine the modal matrix \([X]\) of the system shown in Fig. 6.29 and derive the uncoupled equations of motion. Data From Problem 6.24:- Find the...
Study smarter with the SolutionInn App