P7.7 7.7 Consider the following data for a clinical laboratory Activity Data Ann
ID: 2551936 • Letter: P
Question
P7.7 7.7 Consider the following data for a clinical laboratory Activity Data Annual Costs Test A Test B Test C Test D 2,000 1,500 1,000 500 Cost Driver Activity Receive specimen 10,000 Number of tests Set up equipment 25,000 Number of minutes per test5 5 10 10 15 10 20 Run test Record results Transmit results Total costs 100,000 Number of minutes per test 10,000 Number of minutes per test 5,000 Number of minutes per test 2 2 $150,000 E ABC techniques, determine the activity performing ceach test. costs equal the total annual costs of the laboratory given in the b. Now, using this allocation rate, estimate the total cost of c. Verify that the total annual costs aggregated from individual test table aboveExplanation / Answer
1. Allocation rate for each activity rate
A
B
C
D
E
F
G
H=D+E+F+G
I = B/H
Activity
Annual cost
Cost driver
Test A
Test B
Test C
Test D
Total cost driver pool
Activity cost rate
Receive specimen
$10,000
No of tests
2,000
1,500
1,000
500
5,000
$2
Setup equipment
$25,000
No of minutes per test
5
5
10
10
30
$833
Run cost
$100,000
No of minutes per test
1
5
10
20
36
$2,778
Record results
$10,000
No of minutes per test
2
2
2
4
10
$1,000
Trasmit results
$5,000
No of minutes per test
3
3
3
3
12
$417
Total
$150,000
2. Total cost of performing each test
A
B
C
D
E
F = A*E
G=B*E
H=C*E
I = D*E
Test A
Test B
Test C
Test D
Activity cost rate
Test A
Test B
Test C
Test D
2,000
1,500
1,000
500
$2
$4,000
$3,000
$2,000
$1,000
5
5
10
10
$833
$4,167
$4,167
$8,333
$8,333
1
5
10
20
$2,778
$2,778
$13,889
$27,778
$55,556
2
2
2
4
$1,000
$2,000
$2,000
$2,000
$4,000
3
3
3
3
$417
$1,250
$1,250
$1,250
$1,250
Ans
Total
$14,194
$24,306
$41,361
$70,139
3. Total test costs
Test A
$14,194
Test B
$24,306
Test C
$41,361
Test D
$70,139
Total cost = cost allocated to tests
$150,000
1. Allocation rate for each activity rate
A
B
C
D
E
F
G
H=D+E+F+G
I = B/H
Activity
Annual cost
Cost driver
Test A
Test B
Test C
Test D
Total cost driver pool
Activity cost rate
Receive specimen
$10,000
No of tests
2,000
1,500
1,000
500
5,000
$2
Setup equipment
$25,000
No of minutes per test
5
5
10
10
30
$833
Run cost
$100,000
No of minutes per test
1
5
10
20
36
$2,778
Record results
$10,000
No of minutes per test
2
2
2
4
10
$1,000
Trasmit results
$5,000
No of minutes per test
3
3
3
3
12
$417
Total
$150,000
2. Total cost of performing each test
A
B
C
D
E
F = A*E
G=B*E
H=C*E
I = D*E
Test A
Test B
Test C
Test D
Activity cost rate
Test A
Test B
Test C
Test D
2,000
1,500
1,000
500
$2
$4,000
$3,000
$2,000
$1,000
5
5
10
10
$833
$4,167
$4,167
$8,333
$8,333
1
5
10
20
$2,778
$2,778
$13,889
$27,778
$55,556
2
2
2
4
$1,000
$2,000
$2,000
$2,000
$4,000
3
3
3
3
$417
$1,250
$1,250
$1,250
$1,250
Ans
Total
$14,194
$24,306
$41,361
$70,139
3. Total test costs
Test A
$14,194
Test B
$24,306
Test C
$41,361
Test D
$70,139
Total cost = cost allocated to tests
$150,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.