Valley 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:

The activity usage information associated with the two patients is as follows:

a. Determine the activity cost associated with each patient.
b. Why is the total activity cost different for the two patients?

Transcribed Image Text:

Activity Rate Activity Room and meals Radiology Pharmacy Chemistry lab Operating room $220 per day $290 per image $ 45 per physician order $ 85 per test $920 per operating room hour Patient Barns Patient Powell Number of days Number of images Number of physician orders Number of tests Number of operating room hours 8 days 5 images 6 orders 5 tests 5.5 hours 3 days 2 images 4 orders 2 tests 1.5 hours