costacctg13_sm_ch05

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Unformatted text preview: atient charts, food, and laundry $4,000 × 40; 50; 60 Laboratory services4 $40 × 400; 1,400; 700 Total costs Cost per patient­year 1 2 Drug $ 600,000 300,000 180,000 1,080,000 100,000 54,000 After­Care — $ 600,000 300,000 900,000 120,000 72,000 Total $ 600,000 1,350,000 600,000 2,550,000 300,000 180,000 — $450,000 120,000 570,000 80,000 54,000 160,000 16,000 $880,000 $880,000 40 200,000 56,000 $1,490,000 $1,490,000 50 240,000 28,000 $1,360,000 600,000 100,000 $3,730,000 = $22,000 = $29,800 Allocated using patient­years Allocated using square feet of space 3 Allocated using patient­years 4 Allocated using number of laboratory tests 5-40 1c. The ABC system more accurately allo cates costs because it ident ifies better cost drivers. The ABC system chooses cost drivers for overhead costs that have a cause­and­effect relat ionship between the cost drivers and the costs. Of course, Clayton should cont inue to evaluate if better cost drivers can be found than the ones they have ident ified so far. By imp...
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This note was uploaded on 10/11/2010 for the course ACCT 321 taught by Professor Cole during the Spring '10 term at University of Miami.

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