Isidora’s Clinic Is Considering a Time-Driven Activity-Based Costing System -Refer to the Figure

question 107

Multiple Choice

Isidora’s Clinic is considering a time-driven activity-based costing system. Given the following data:
$\begin{array}{|l|l|l|l|l|}\hline \text { Resources } & & & \text { Activities } & \text { Time/Activity } \\\hline\text { Supervision } & \$ 60,000 & & \text { Treating patients } & 1.40 \mathrm{hr} . \\\hline \text { Supplies and uniforms } & \$ 80,000 & & \text { Providing hygienic care } & 1.00 \mathrm{hr} \\\hline \text { Salaries } & \$ 350,000 & & \text { Respond to requests } & 0.60 \mathrm{hr} \\\hline \text { Computer } & \$ 10,000 & & \text { Monitor patients } & 1.00 \mathrm{hr} \\\hline \text { Monitor } & \$ 25,000 & & &\\\hline \text { Total } & \$ 525,000 \\\hline\text { Total nursing hours } \\\text { (practical capacity) } & 15,000 \\\hline\end{array}$

-Refer to the figure.What is the activity rate for responding to requests?

• A)$21
• B)$25
• C)$35
• D)$50

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Definitions:

Habitual Decision Making

The process of making choices that are consistent and routine, often without much thought, typically based on past behaviors and patterns.

Sunk-Cost Fallacy

Misguided reasoning that further investment is warranted on something simply because the resources already invested will otherwise be lost, without regard for future costs and benefits.

Limited Problem Solving

A decision-making process characterized by a consumer engaging in minimal search and deliberation, usually applied to familiar and low-stakes purchases.

Lower-Income

Describes individuals or families that earn significantly less money than the average for their society or community.