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Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins
Edition 5ISBN: 0073526940Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins
Edition 5ISBN: 0073526940Activities and Cost Drivers in a Hospital
Greenbelt Hospital has the following activities in its value chain of providing service to each inpatient admission:
1. Schedule patient.
2. Verify insurance.
3. Admit patient.
4. Prepare patient’s room.
5. Review doctor’s report.
6. Feed patient.
7. Order tests.
8. Move to/from laboratory.
9. Administer lab tests.
10. Order pharmaceuticals.
11. Complete patient report.
12. Check patient’s vital signs.
13. Prepare patient for operation.
14. Move to/from operating room.
15. Operate.
16. Collect charges
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17. Discharge patient.
18. Bill insurance.
Required Assume that the cost object is the individual patient. Determine the appropriate cost driver(s) for each activity.
Verified
Step 1 of 2
Cost is expense of resource which happens when the resource is used. Cost object is basically the activity or object to which the cost is associated and is measured for. Cost driver is a reason that brings change to cost of an activity.
Step 2 of 2
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