Hospital Z allocates its operating costs using activity based costing across three departments Emergency Room (ER), Surgery, and Pediatrics The following table summarizes the costs and cost drivers Department Total Costs ($) Cost Driver Cost Driver Quantity ER $600,000 Number of visits 12,000 visits Surgery $1,000,000 Surgery hours 25,000 hours Pediatrics $400,000 Number of patients 20,000 patients Total $2,000,000 ER had 3,000 visits, Surgery performed 8,000 hours of surgeries, and Pediatrics treated 4,000 patients a Allocate the hospital's operating costs to ER, Surgery, and Pediatrics using activity based costing b Calculate the cost per visit in ER, cost per surgery hour in Surgery, and cost per patient in Pediatrics based on the allocated costs c Analyze the results and discuss which department has the highest cost per unit and why

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Question: Hospital Z allocates its operating costs using activity-based costing across three departments: Emergency Room (ER), Surgery, and Pediatrics. The following table summarizes the costs and

Hospital Z allocates its operating costs using activity-based costing across three departments: Emergency Room (ER), Surgery, and Pediatrics. The following table summarizes the costs and cost drivers:

Department	Total Costs ($)	Cost Driver	Cost Driver Quantity
ER	$600,000	Number of visits	12,000 visits
Surgery	$1,000,000	Surgery hours	25,000 hours
Pediatrics	$400,000	Number of patients	20,000 patients
Total	$2,000,000

ER had 3,000 visits, Surgery performed 8,000 hours of surgeries, and Pediatrics treated 4,000 patients.

a. Allocate the hospital's operating costs to ER, Surgery, and Pediatrics using activity-based costing. b. Calculate the cost per visit in ER, cost per surgery hour in Surgery, and cost per patient in Pediatrics based on the allocated costs. c. Analyze the results and discuss which department has the highest cost per unit and why.

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