clinical laboratory_Activity Based Accounting

  

6.7.

 Consider the following data for a clinical laboratory:

Activity Data

Activity Annual Costs     Cost Driver                                                 Test A  Test B  Test C  Test D

Receive specimen  $  10,000  Number of tests                                  2,000  1,500  1,000    500

Equipment set up            25,000  Number of minutes per test           5           5             10    10

Run test               100,000  Number of minutes per test                        1            5             10    20

Record results   10,000  Number of minutes per test                          2            2             2        4

Transmit results                5,000  Number of minutes per test                            3            3             3        3

Total costs           $150,000

a. Using ABC techniques, determine the allocation rate for each activity.

b.  Now, using this allocation rate, estimate the total cost of performing each test.

 

c.  Verify that the total annual costs aggregated from individual test costs equal the total annual costs of the laboratory given in the table above.