Step bys Step ABC-A Service Application Grand Haven is a senior living community that offers a full range ofservices including independent living, assisted living, and skilled nursing care. The assisted livingdivision provides residential space, meals, and medical services (MS) to its residents. The currentcosting system adds the cost of all of these services (space, meals, and MS) and divides it by totalresident days to get a cost per resident day for each month. Recognizing that MS tends to vary signifi-cantly among the residents, Grand Haven's accountant recommended that an ABC system be designedto calculate more accurately the cost of MS provided to residents. She decided that residents shouldbe classified into four categories (A, B, C, D) based on the level of services received, with group Arepresenting the lowest level of service and D representing the highest level of service. Two cost driv-ers being considered for measuring MS costs are number of assistance calls and number of assistantcontacts. A contact is registered each time an assistance professional provides medical services or aidto a resident. The accountant has gathered the following data for the most recent annual period:Number of AssistanceContacts60,000ResidentClassificationAnnual AssistanceAnnual Resident DaysHoursABCDA.8,76015,0006,57020,00052,000C.4,38022,50052,0002,19032,50052,00021,90090,000216,000Other data:Total cost of medical services for the period.Total cost of meals and residential space.$5,000,000$3,280,000Required (Round Answers and Intermediate Calculations to the Nearest Dollar)a. Determine the ABC cost of a resident day for each category of residents using assistance hours asthe cost driver.b. Determine the ABC cost of a resident day for each category of residents using assistance contactsas the cost driver.c.Which cost driver do you think provides the more accurate measure of the cost per day for aGrand Haven resident?

In ABC costing method, the costs are allocated on the basis of the activities used as cost…

Required (Round Answers and Intermediate Calculations to the Nearest Dollar) a. Determine the ABC cost of a resident day for each category of residents using assistance hours as the cost driver. b. Determine the ABC cost of a resident day for each category of residents using assistance contacts as the cost driver. Which cost driver do you think provides the more accurate measure of the cost per day for a Grand Haven resident?

Required (Round Answers and Intermediate Calculations to the Nearest Dollar) a. Determine the ABC cost of a resident day for each category of residents using assistance hours as the cost driver. b. Determine the ABC cost of a resident day for each category of residents using assistance contacts as the cost driver. Which cost driver do you think provides the more accurate measure of the cost per day for a Grand Haven resident?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 5CE: Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each...

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Not Graded please assist ABC-A Service ApplicationGrand 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…
P5-3A ABC -- A Service Application 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 the 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 privided to residents. She decided that residents should be classified into four categories into four categories (A, B, C, D) based on the level of service. Two cost drivers being considered for measuring MS costs and number of assistance calls and number of assistant contacts. A contact is registered each time an assistance professional provides…
not graded please answer with the A. b. C formatso I know what you're doing 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…
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Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three services are provided for seniors—home nursing, Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow: Total Home Nursing Meals On Wheels House-keeping Revenues $ 929,000 $ 266,000 $ 406,000 $ 257,000 Variable expenses 468,000 116,000 196,000 156,000 Contribution margin 461,000 150,000 210,000 101,000 Fixed expenses: Depreciation 69,400 8,400 40,900 20,100 Liability insurance 43,400 20,500 7,400 15,500 Program administrators’ salaries 115,900 40,500 38,600 36,800 General administrative overhead* 185,800 53,200 81,200 51,400 Total fixed expenses 414,500 122,600 168,100 123,800 Net operating income (loss) $ 46,500 $ 27,400 $ 41,900 $ (22,800) *Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, considers last year’s…
Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three services are provided for seniors—home nursing, Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow: Total Home Nursing Meals On Wheels House-keeping Revenues $ 919,000 $ 262,000 $ 402,000 $ 255,000 Variable expenses 471,000 112,000 205,000 154,000 Contribution margin 448,000 150,000 197,000 101,000 Fixed expenses: Depreciation 69,700 8,200 40,800 20,700 Liability insurance 43,100 20,100 7,400 15,600 Program administrators’ salaries 116,600 40,900 38,700 37,000 General administrative overhead* 183,800 52,400 80,400 51,000 Total fixed expenses 413,200 121,600 167,300 124,300 Net operating income (loss) $ 34,800 $ 28,400 $ 29,700 $ (23,300) *Allocated on the basis of program revenues. The head administrator of Jackson County Senior…
Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three services are provided for seniors—home nursing, Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow: Total Home Nursing Meals On Wheels House-keeping Revenues $ 923,000 $ 265,000 $ 405,000 $ 253,000 Variable expenses 470,000 111,000 202,000 157,000 Contribution margin 453,000 154,000 203,000 96,000 Fixed expenses: Depreciation 69,200 8,200 40,400 20,600 Liability insurance 43,800 20,300 7,600 15,900 Program administrators’ salaries 116,000 40,900 38,200 36,900 General administrative overhead* 184,600 53,000 81,000 50,600 Total fixed expenses 413,600 122,400 167,200 124,000 Net operating income (loss) $ 39,400 $ 31,600 $ 35,800 $ (28,000) *Allocated on the basis of program revenues. The head administrator of Jackson County Senior…
Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three services are provided for seniors—home nursing, Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow: Total Home Nursing Meals On Wheels House-keeping Revenues $ 930,000 $ 267,000 $ 405,000 $ 258,000 Variable expenses 474,000 119,000 198,000 157,000 Contribution margin 456,000 148,000 207,000 101,000 Fixed expenses: Depreciation 69,100 8,300 40,600 20,200 Liability insurance 44,100 20,900 7,800 15,400 Program administrators’ salaries 114,600 40,200 38,400 36,000 General administrative overhead* 186,000 53,400 81,000 51,600 Total fixed expenses 413,800 122,800 167,800 123,200 Net operating income (loss) $ 42,200 $ 25,200 $ 39,200 $ (22,200) *Allocated on the basis of…
Need help using ABC product costing model. Grand Haven is a senior living community that offers a full range of services including independent living, assisted living, and skilled nursing care. The asssited 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, Grant Haven's accountant recommended that an ABC system be designed to calculate more accurated 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 services and D representing the highest level of service. Two cost drivers being considered for measuring MS costs are number of assistance calls…
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