Problem: You are the Chief Operating Officer of a large Manila hospital that has decided to implement activity-based costing. Which of the following would you choose as the allocation base for allocating the costs of the Linen and Laundry Department to the four patient wards that utilize linen and laundry services if your objective is to generate the most accurate cost information possible? The four wards are (1) surgery, (2) adolescent care, (3) maternity and nursery, and (4) pediatric care.
(A) Patient occupancy rates (i.e., patient days) in each ward.
(B) The number of washing machines in the Laundry and Linen Department
(C) The number of Medicare patients in each ward.
(D) The number of patient admissions to each ward.