Question: Activity Based Costing
A dialysis clinic offers two services hemiodialysis(HD) and peridoneal dialysis (PD). HD requires patients to come to the clinic three time a week to receive treatment. PD allows patients to administer their own treatment daily in their own homes. The profit analysis of the two services follows:
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Total
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HD
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PD
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Revenues
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3,006,775
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1,860,287
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|
1,146,488
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Total revenue
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Analyzed service costs
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649,900
|
|
512,619
|
|
152,281
|
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Standard supplies
|
310,695
|
|
98,680
|
|
212,015
|
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Episodic supplies
|
785,825
|
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General overhead
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Unanalyzed service costs
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Durable equipment
|
137,046
|
|
116,489
|
|
20,557
|
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Nursing services
|
|
883,280
|
|
750,788
|
|
132,492
|
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Activity
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Costs
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Cost Driver
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HD useage
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PD Usage
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Facility costs
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233,226
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Sq Footage
|
18,900
|
11,100
|
|
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Support Staff
|
354,682
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Number of patients
|
102
|
62
|
|
|
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Communications
|
157,219
|
Number of treatments
|
14,343
|
20,624
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|
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Utilities
|
40,698
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Kilowatt usage
|
563,295
|
99,405
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Total
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What is the profitability of the two services under ABC? Calculate the average cost per treatment using ABC.