The Wellness Clinic Is Considering a Time-Driven Activity Based Costing

question 115

Multiple Choice

The Wellness Clinic is considering a time-driven activity based costing system. Given the following data: $$\begin{array} { | l | r | l | l | r | } \hline \text { Resources } & & & { \text { Activities } } & \text { time/activity } \\\hline \text { supervisi on } & \$ 60,000 & & \text { treating patients } & 1.40 \mathrm { hr } \\\hline \text { supplies and uniforms } & \$ 80,000 & & \text { providing hygienic care } & 1.00 \mathrm { hr } \\\hline \text { sal aries } & \$ 350,000 & & \text { responding to requests } & 0.60 \mathrm { hr } \\\hline \text { computer } & \$ 10,000 & & \text { monitoring patients } & 1.00 \mathrm { hr } \\\hline \text { monitor } & \$ 25,000 & & & \\\hline \text { Total } & \$ 525,000 & & & \\\hline \begin{array} { l } \text { Total nursing hours } \\\text { (practical capacity) }\end{array} & 15,000 & & & \\\hline\end{array}$$
What is the activity rate for treating patients?

• A)$35
• B)$49
• C)$21
• D)$140

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Definitions:

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Shares of ownership of a corporation.

Brokerage Commission

A fee charged by a broker for executing a transaction or providing specialized services.

Accrued Interest

Interest that has accumulated over time but has not yet been paid or received.

Equity Method

An accounting technique used to record investments in other companies where significant influence exists but control does not.