Consider the following data for a clinical laboratory.

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

Recieve specimen $10,000 Number of Test 2,000 1,500 1,000 500

Equipment Setup $25,000 Num of min per test 5 5 10 10

Run Test $100,000 Num of min per test 1 5 10 20

Record Results $10,000 Num of min per test 2 2 2 4

Transmit results $5,000 Num of min per test 3 3 3 3

Total Cost $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 cost aggregated from individual test cost eqial the total annual cost of the laboratory given in the table above.

Posted on: January 10, 2019, by :

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