Exercise 17-18 Activity-based costing LO P3 Surgery Center is an outpatient surgical clinic that was profitable for many years, but Medicare has cut its reimbursements by as much as 40%. 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 Professional salaries $1,215,000 Patient services and supplies Building cost 20,000 105,000 Cost Driver Professional hours Number of patients Square feet Driver Quantity 9,000 500 1,400 The two main surgical units and their related data follow. Service Hours General surgery 2,000 Orthopedic surgery 7,000 Square Feet Patients 550 350 850 150 * 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. (Round your final answers to whole dollar.) Activity Professional salaries Patient services and supplies Building cost General Surgery Orthopedic Surgery Overhead Cost Activity Drivers Activity Rate Activity driver incurred Overhead assigned Activity driver incurred Overhead assigned Professional hours Number of patients Square feet