Chapter 10 accounting System 447 Obj.7 Chapter 10 Accounting Systems for Manufacturing Operations SER E10-24 Activity-based costing for a hospital Deer Lodge Regional 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: Activity Activity Rate Room and meals $225 per day Radiology $300 per image Pharmacy $50 per physician order Chemistry lab $125 per test Operating room $3,000 per operating room hour a. Patient Franklin, $2,925 The records of two representative patients were analyzed, using the activity rates. The activity information associated with the two patients is as follows: Patient Franklin Patient Kramer Number of days 1 days Number of images 2 images Number of physician orders 1 orders Number of tests 2 tests Number of operating room hours 0.6 hour 1. Determine the activity cost associated with each patient. b. Why is the total activity cost different for the two patients? 4 days 5 Images 8 orders 5 tests 2.8 hours