Activity-Based Product Costing Suppose that a surgical ward has gathered the following information for four nursing activities and two types of patients: Patient Category Driver Normal Intensive Activity Rate Treating patients Treatments 6,400 8,000 $4.00 Providing hygienic care Hygienic hours 4,800 17,600 5.00 Responding to requests Requests 32,000 80,000 2.00 Monitoring patients Monitoring hours 6,000 72,000 3.00 Required: 1. Determine the total nursing costs assigned to each patient category. Costs Assigned Normal $ Intensive $ 2. Output is measured in patient days. Assuming that the normal patient category uses 8,000 patient days and the intensive patient category uses 6,400 patient days, calculate the nursing cost per patient day for each type of patient. (Round to two decimal places.) Normal $ per patient day Intensive $ per patient day 3. Conceptual Connection: The supervisor of the surgical ward has suggested that patient days is the only driver needed to assign nursing costs to each type of patient. Calculate the charge per patient day (rounded to the nearest cent) using this approach. $ per patient day
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.
Activity-Based Product Costing
Suppose that a surgical ward has gathered the following information for four nursing activities and two types of patients:
| Patient Category | |||||
| Driver | Normal | Intensive | Activity Rate | ||
| Treating patients | Treatments | 6,400 | 8,000 | $4.00 | |
| Providing hygienic care | Hygienic hours | 4,800 | 17,600 | 5.00 | |
| Responding to requests | Requests | 32,000 | 80,000 | 2.00 | |
| Monitoring patients | Monitoring hours | 6,000 | 72,000 | 3.00 |
Required:
1. Determine the total nursing costs assigned to each patient category.
| Costs Assigned | |
| Normal | $ |
| Intensive | $ |
2. Output is measured in patient days. Assuming that the normal patient category uses 8,000 patient days and the intensive patient category uses 6,400 patient days, calculate the nursing cost per patient day for each type of patient. (Round to two decimal places.)
| Normal | $ per patient day |
| Intensive | $ per patient day |
3. Conceptual Connection: The supervisor of the surgical ward has suggested that patient days is the only driver needed to assign nursing costs to each type of patient. Calculate the charge per patient day (rounded to the nearest cent) using this approach.
$ per patient day
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