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:

Unclassified Balance Sheet

A simplified financial statement that presents assets, liabilities, and equity without categorizing them into further subdivisions.

Classified Balance Sheet

A financial statement that segregates assets and liabilities into current and non-current categories, providing a detailed snapshot of a company's financial condition at a specific time.

Permanent Accounts

Permanent accounts are those ledger accounts whose balances are carried over from one accounting period to the next, including assets, liabilities, and equity accounts.

Current Liabilities

Obligations or debts that a company is expected to pay within a year, such as accounts payable, short-term loans, and accrued expenses.