A hospital pharmacy fills three types of prescriptions

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A hospital pharmacy fills three types of prescriptions. Prescription A requires refrigeration to maintain the drug’s activity. Prescription B has potentially fatal interactions with other drugs and therefore requires careful review by a Pharmacist. Prescription C is a basic, common drug that presents negligible risk to the patient. Prescription A is a brand-name drug still on patent, and therefore the charge for the drug is high relative to its cost. Consider the following data for the hospital pharmacy:
Annual Prescription Volume, Total Direct Costs, and Total Charges
               Prescription (Rx)A   Prescription (Rx)B   Prescription (Rx)C
Annual volume       50           200           1,000
Total direct costs      $7,668           $48,840       $31,300
Total charges           $35,000       $70,000       $50,000

Budgeted Overhead Costs and Activity Date
                               Cost Driver Consumption
                                   Per One Rx
Activity   Annual   Costs   Cost Driver           Rx A   Rx B       Rx C  
Refrigeration   $8,000       Number Units           1   0       0
               requiring refrigeration
Materials   $24,000   Number of feet to drug   50   20       10
handling           storage area      

Prescription    $90,000   Number of Pharmacist   15   60       3
review           minutes      

Total costs:    $122,000

Questions:
a.   Using the cost-to-charges ratio (CCR) method, determine the overhead that would be allocated to each type of prescription A, B, and C.                         
continued
b.   Determine the total cost (Direct and Indirect cost) of filling one of each type of prescription if overhead is allocated using CCR.
c.   Using ABC techniques, determine the allocation rate for each overhead activity and determine the overhead that would be allocated to each type of prescription, A, B and C.
d.   Determine the total cost (Direct cost and Indirect cost) of filling one of each type of prescription if overhead is allocated using ABC techniques.
e.   Explain the reasons for the difference in the full cost of each prescription in parts b and d.