In the past, Casiopia Hospital allocated all of its overhead costs to patients based on nursing…

In the past, Casiopia Hospital allocated all of its overhead costs to patients based on nursing time. Casiopia has decided to switch to an activity based costing system using three activity cost pools. Information related to the new system is as follows:

 

 

Estimated Overhead

 

Activity Cost Pool

Activity Measure

Cost

Estimated Activity

Registration

Number of patients

$75,000

1,000 patients

Patient care

Nursing time

$900,000

150,000 hours

Billing

Number of bills

$120,000

2,500 bills

Data concerning two patients follows:

Patient

Nursing time

Number of bills

Wells

100 hours

2

Muncie

60 hours

3

Under the new activity-based costing system, how much overhead cost would be assigned to each patient?

 

Wells

Muncie

A)

$696

$504

B)

$723

$483

C)

$730

$438

D)

$771

$579

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