Introduction:Management in clinical diagnostic fields are frequently involved in cost analysis of new procedures due to the constantly changing science and technology. Also due to the health care organization especially the diagnostic division being tightly regulated by accreditation and regulatory bodies bringing a new procedure in-house requires in depth analysis prior to an any decision being taken.
Cost Object:In a clinical laboratory in a small community hospital we currently refer specimens for free PSA (prostatic specific antigen) to a large commercial laboratory. A prominent physician on staff has requested that us to start doing the test in-house to improve turnaround time. To do this, we would need to offer a total PSA and a
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The same can be done for processing costs. Pricing information for the consumables used is available from the utilization reports generated monthly by the finance department.
When calculating reagents costs, the cost of the reagent actually used to run a single test is easy to calculate based on the known volume of reagent used and the cost per volume. These numbers are available from information generated by vendors. The cost of calibrators and controls is also available, but the actual cost of these per test can be determined by using the following formula:Cost of total amount usedTotal number of tests performed (using a particular calibration and/or control run time-table).
E.g. Three levels of control are run once per shift for 9 tests including free PSA and the instrument uses 0.2 ml. of control, the cost of 0.2 ml of control solution is $.91 each.
($.91 X 3) = $ .309Note: Sometimes, when these numbers are very small, they can be included as a factor and not evaluated directly.
Factors used in Laboratory labor cost calculations in this laboratory include time required to perform the test as well s wage and benefit cost. The formula used isX +E.g. Free PSA test takes three minutes of a medical technologist's time to perform and report, the
One of the goals of the clinic should be in improving the process flow up to the point that the actual scan will take place. The clinic must also eliminate much of the variability and uncertainties in the scanning process which is ultimately making the process difficult to manage. The uncertainties negatively affect work
If the cost system reported sales volume and/or price we would be able to conduct an activity analysis to determine an appropriate cost function to determine the best cost driver for each product.
by subtracting the cost of the active ingredients per case and the re-work costs per case from the expected
Price: What is the cost (financial or nonfinancial) to the priority population to obtain the product and its benefits? In the budget I submitted there was a cost of $43,266 for the first year. We have sponsorships and a fundraiser but we will have to do some grant writing for the next three years while we institute the program. In anticipation of potential classroom interruptions and challenges while the program is being introduced we have recruited support from parents, mentors provided by our business partner and our sponsor Northern Mutual Insurance Corporation to provide tutoring and other supports as needed before and after school, once or twice a week. The district has increased its budget for paraprofessionals. Some of paraprofessionals within the district at a nearby school will be flexing their time between schools to provide additional in classroom support for the most challenging classrooms or students. When we successfully implement the program we hope to use the same paraprofessionals that are trained to begin the program in the other school. This program will cost everyone in the school extra effort to implement, in addition to any financial cost.
Actual costing is rarely used because managers can’t wait until the end of the year to obtain product costs. Information about product costs is needed as the year goes for planning, control, and decision making.
An in depth analysis of the current costing methods used by the beverage distribution company, Johnson Beverage Inc.
RE = [$1.30 × (1 + 0.060)] / $36.80 + 0.060 = 0.097446 = 9.74 percent (3)
This method of calculating costs could be beneficial or not depending on the organization and its size. In a healthcare setting, any healthcare institution is seen as delivering quality care and therefore most decisions regarding choice of the institution come down to the pricing. In order to compete for patients, the healthcare institution must bring its price down to the absolute margin. This will over time affect the institution badly as it will leave the institution without funds to replace the capital equipment. This can eventually lead to closing down of the financially weaker
Littlefield Laboratories has opened a new blood testing lab. This laboratory uses the same process as the lab encountered in your prior assignment, Capacity Management at Littlefield Labs—neither the process sequence nor the process time distributions have changed. The lab began operations with a raw materials inventory of 160 kits and $1,000,000 cash. Customer demand continues to be random, but the expected daily demand will not change during the lab’s life span. Expert advisors know that demand will end abruptly on Day 268 and the lab will no longer be necessary. Any remaining machinery or inventory will be useless after Day 268, and thus have no residual value.
For each target fill rate the proportion of bottles filled correctly had to be determined. This calculation provides a breakdown between cases that can be sold for the full amount of $186 and cases that are designated as seconds, which are sold for 80% of the full price or $148.80. Revenue per case grows continuously as the target fill rate increases. From the blending costs which include $67,662 of active ingredient per 5000 liters, and blending labor of $432 per 5000 liter batch the cost per ounce of medication is approximately $0.40. This provides input for the active ingredient cost. Based on the labor cost of $8.50 per hour at 12 cases per hour, the input for rework cost per case is approximately $0.70 per case. Contribution per case is derived from the revenue minus the costs. The contribution per case is the performance criteria that our decision is based upon.
6. Calculate the volume-based (traditional) cost per reel for grades A-D identified in Exhibit 1.
The Coca-cola company is a homogeneous product manufacturer company. With 1.7 Billions units sold a day, the company is the largest soft drink manufacturer in the world and hence it becomes important to have a simple accounting system to determine how much these products should be sold at. The process costing determines the average cost for each unit so that it is easy to sell both a large amount of products or a small amount and understand how much profit is being made on the products. This type of accounting system would not be as effective if the company was creating many different items that had different costs of tasks throughout the process.
The Darby Company is re-evaluating its current production and distribution system in order to determine whether it is cost-effective or if a different approach should be considered. The company produces meters that measure the consumption of electrical power. Currently, they produce these meters are two locations – El Paso, Texas and San Bernardino, California. The San Bernardino plant is newer, and therefore the technology is more effective, meaning that their cost per unit is $10.00, while the El Paso plant produces at $10.50. However, the El Paso plant has a higher capacity at 30,000 to San Bernardino’s 20,000. Once manufactured, the meters are sent to one of three distribution centers – Ft. Worth, Texas, Santa