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Before attempting to complete this assignment, review the following learning material:
Jean, M. & Young, C. (2016). Asante Teaching Hospital: Activity-Based Costing.
Complete the following:
Perform a strengths, weaknesses, opportunities and threats (SWOT) analysis. What implications can you draw for the pricing strategy alternatives?
Calculate the cost per minute for each type of employee.
Allocate overhead costs to each level of service using the appropriate cost drivers.
Calculate total costs per patient and price per patient at each level of care.
If you were Young, what pricing recommendation would you make to the CEO?
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CALCULATION HINT
You need to calculate the cost per minute of time available for the various medical personnel. Part of that is to know how many minutes are available in a given year (since the cost data is given in years). Here’s the calculation for the OB/GYNs. An OB/GYN has 42 hrs * 52 weeks = 2,184 hours to start. Each one takes 8 days off, 6 sick days, and 12 holidays. This works out to 26 days, multiplied by 42 hrs per week / 5 days per week to equal 8.4 hours per day, * 26 days to get 218.4 hours off. They also get 2 hours per week of training for another 104 hours not available. This totals 2,184 – 218.4 – 104 = 1,861.6 hours per year available. Multiply that by 60 minutes per hour to get 111,696 minutes per year. You should modify this for any employees who have different hours per week.
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