Grand Haven is a senior living community that offers a full range of services including independent living, assisted living, and skilled nursing care. The assisted living division provides residential space, meals, and medical services (MS) to its residents. The current costing system adds the cost of all of these services (space, meals, and MS) and divides by total resident days to get a cost per resident day for each month. Recognizing that MS tends to vary significantly among the residents, Grand Haven's accountant recommended that an ABC system be designed to calculate more accurately the cost of MS provided to residents. She decided that residents should be classified into four categories (A, B, C, D) based on the level of services received, with group A representing the lowest level of service and D representing the highest level of service. Two cost drivers being considered for measuring MS costs are number of assistance calls and number of assistant contacts. A contact is registered each time an assistance professional provides medical services or aid to a resident. The accountant has gathered the following data for the most recent annual period: Resident Classification Annual Resident Days Annual Assistance Hours Number of Assistance Contacts 8,760 15.000 60.000 6.570 20.000 52.000 4,380 22,500 52,000 2190 32500 52.000 21,900 90,000 216.000 Other data: Total cost of medical services for the period $2.000.000 Total cost of meals and residential space $1,142.500 a. Determine the ABC cost of a resident day for each category of residents using assistance hours as the cost driver. Round answer below to the nearest dollar. Medical services cost per assistance hour S NOTE: Use yourrounded answer above to compute.answers below, Round final answers to the nearest dollar. Per Day Costs Medical Services Meals and Residential Total Class AS Class B Class C Class D b. Determine the ABC cost of a resident day for each category of residents using assistance contacts as the cost driver. Round answer below to the nearest dollar. Medical services cost per assistance contacts $ 0 NOTE: Use your rounded answer above to compute answers below. Round final answers to the nearest dollar.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
How do I calculate Activity Based Costing
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