Health Co-op is an outpatient surgical clinic that wants to better understand its costs. It decides
to prepare an activity-based cost analysis, including an estimate of the average cost of both
general surgery and orthopedic surgery. The clinic
Solution
1.  average cost per patient = total cost/total patients =
(2223000+38480+221400)/740=3,355.24 per patient
2.
3.  total cost for General surgery = 3200*195 + 470*52+670*135=$738890
average cost per patient for the general surgery unit=738890/470=$1572.11 per patient
Cost Center Cost Cost Driver Driver Quantity Cost per cost driver
Professional
salaries
$2,223,000 Professional Hours 11,400 $195.00 per patient hour
Patient
services and
supplies
38,480 Number of patients 740 $52.00 per patient
Building
cost
221,400 sq feet 1,640 $135.00 per sq feet