The company provides doctors and patients a variety of support services during treatment and allocates the cost of these activities through the company's costing system, which uses a single overhead rate. Currently, the company uses an allocation rate of 48% of the surgical fee charged to the patient.\ Managers have expressed concern that the current system is producing inaccurate costs and profitability for the joint replacement procedures. As a result, Bree Swifty, the company's controller, initiated a study to explore the potential for implementing an activity-based costing system. She has collected the following data on each of the procedures.\ Fee charged to patient\ Number of procedures per year\ Average time per procedure\ Number of procedures per operating room session\ Inpatient days per procedure\ Surgeon's fee per procedure\ Medical supplies per procedure\ Hip\ $10,000\ 1,000\ 4.0 hours\ 2\ 4\ $1.200\ $400\ Knee\ $16,000\ 500\ 1.0 hours\ 1\ 3\ $1,800\ $200\ Shoulder

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The data Bree Swifty collected provides a good starting point for implementing an activitybased costing ABC system for joint replacement proceduresHeres how she can proceed 1 Identify Activities and C... View the full answer