Western Dialysis Clinic

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Advanced Management Accounting, R. S. Kaplan, A. A. Atkinson, International Edition, Third Edition, Prentice Hall International, Inc, 1998 p. 116. Answer all four requirements of the case study. In addition to these requirements you are recommended to exhibit your ability to: 1) Critically evaluate the advantages and drawbacks of traditional costing systems. 2) Compare activity-based costing systems to traditional costing systems. 3) Analyze the circumstances and provide arguments with solid numbered reasoning to support appropriateness of any of the two systems. 4) Foresee and critically assess the implications of moving from one system to another. Table 1 Clinic income statement Total HD PD Revenues Number of patients…show more content…
For Phase 1 under ABC system we have a loss of –5% for HD and increase to 27% for PD. Pricing decisions can be made in a more informed way with ABC information. For example we have a competitive market, if we decide to decrease PD

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