Question 14Hermes Hospitals Group (HHG) provides a private hospital medical services to privateclients and company employees who are members of their insurance scheme. ServiceHeads coordinate and organize the medical services provided using MedicalConsultants and their own theatre staff and nurses. Each medical procedure or servicehas a standard price and costs are carefully controlled by benchmarking against theNHS using industrial intelligence. A further 10% in costs is allowed based on the goalto improve the customer's experience by providing more nursing and consumablessuch as towels, slippers and other comforts. Customers (patients) are given a riskassessment and the medical procedure or service is undertaken on a fixed price basis,subject to major alterations in the service provided. eHHG prides itself in providing a reliable, high quality service using the latest medicaltechniques and highly competent Consultant surgeons. Longer term, HHG would liketo have a full complement of surgical services for all non-emergency operations andbe the provider that individuals and companies choose. However, this would not beundertaken without making sure it's main shareholders, Life & Pensions Inc who arebased in USA, are happy with the proposed return. Life & Pensions currently expect,on average, a 6% return. Currently Oncology and Ear, Nose and Throat are not offered.Required: e(a) Draft a core Mission and Vision for HHG and justify it in relation to thebackground information you have been given in the question. e

Mission To provide reliable, high quality service using the latest medical techniques and highly…

Answered: (a) Draft a core Mission and Vision for…

(a) Draft a core Mission and Vision for HHG and justify it in relation to the background information you have been given in the question. e

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Activity-Based Costing

Section: Chapter Questions

Problem 4ADM

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Cost Effectiveness Analysis Again, ATH is trying to be preemptive in the face of the influenza threat. Local board of health always highly recommend all employees of healthcare organizations receive the flu shot. Healthcare organizations then typically require them. Here are some statistics for your use. Review Module 9 if you are unsure of the terms I am about to present to you. ATH employees 1200 employees ATH employees full time, part time, and PRN employees for a total of 750 FTEs The average wage for all employees is $20 hour ATH has 200 patient beds. Its occupancy rate is typically 85%. The average cost per flu shot is $15 The last outbreak of H1N1 hit the hospital hard. The average number of hours that had to be covered of absent employees on any given day totaled 200. There were four days of this. How many hours total had to be covered?
Partial Operational and Financial Productivity; Medical Practice Family Medical Care (FMC)is a family medical practice with 6 physicians, a nursing staff of 8 to 10 nurses, and an administrativestaff that varies from 4 to 7 personnel. Rajat Patel, the chief physician at FMC, is interested in studyingthe efficiency of the practice as a basis to set some benchmarks for further improvement, for rewardinghis staff, and for comparing the efficiency of the FMC practice to other family medical practices. Heis able to get comparable data for other practices from industry sources. So that the data are consistentwith the industry sources, Patel has asked Marin & Associates, his accounting firm, to develop a set ofproductivity measures that would satisfy this requirement. Upon investigation, Joseph Marin finds thatthe measures to be used are the partial financial and operational productivity measures as defined inthe chapter. The following information is for the last 2 years for the FMC…
Regression; choosing among models. Apollo Hospital specializes in outpatient surgeries for relatively minor procedures. Apollo is a nonprofit institution and places great emphasis on controlling costs in order to provide services to the community in an efficient manner. Apollo’s CFO, Julie Chen, has been concerned of late about the hospital’s consumption of medical supplies. To better understand the behavior of this cost, Julie consults with Rhett Bratt, the person responsible for Apollo’s cost system. After some discussion, Julie and Rhett conclude that there are two potential cost drivers for the hospital’s medical supplies costs. The first driver is the total number of procedures performed. The second is the number of patient-hours generated by Apollo. Julie and Rhett view the latter as a potentially better cost driver because the hospital does perform a variety of procedures, some more complex than others. Rhett provides the following data relating to the past year to Julie.…
ABC, Resource Drivers, Service Industry Glencoe Medical Clinic operates a cardiology care unit and a maternity care unit. Colby Hep worth, the clinic’s administrator, is investigating the charges assigned to cardiology patients. Currently, all cardiology patients are charged the same rate per patient day for daily care services. Daily care services are broadly defined as occupancy, feeding, and nursing care. A recent study, however, revealed several interesting outcomes. First, the demands patients place on daily care services vary with the severity of the case being treated. Second, the occupancy activity is a combination of two activities: lodging and use of monitoring equipment. Since some patientsrequire more monitoring than others, these activities should be separated. Third, the daily rateshould reflect the difference in demands resulting from differences in patient type. Separating theoccupancy activity into two separate activities also required the determination of the cost of…
ABC, Resource Drivers, Service Industry Glencoe Medical Clinic operates a cardiology care unit and a maternity care unit. Colby Hepworth, the clinic’s administrator, is investigating the charges assigned to cardiology patients. Currently, all cardiology patients are charged the same rate per patient day for daily care services. Daily care services are broadly defined as occupancy, feeding, and nursing care. A recent study, however, revealed several interesting outcomes. First, the demands patients place on daily care services vary with the severity of the case being treated. Second, the occupancy activity is a combination of two activities: lodging and use of monitoring equipment. Since some patients require more monitoring than others, these activities should be separated. Third, the daily rate should reflect the difference in demands resulting from differences in patient type. Separating the occupancy activity into two separate activities also required the determination of the cost…
Unit Costs in a service Business p9. Everymans Hospital relies heavily on cost data to keep its pricing structures in line with those of its competitors. The hospital provides a wide range of services, includ- ing intensive care, intermediate care, and a neonatal nursery. The hospital’s controller is concerned about the profits generated by the 30-bed intensive care unit (ICU), so Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Chapter…
Pareto chart and cost of quality report for a service company The administrator of Hope Hospital has been asked to perform an activity analysis of the emergency room (ER). The ER activities include cost of quality and other patient care activities. The lab tests and transportation are hospital services external to the ER for determining external failure costs. The result of the activity analysis is summarized as follows: Activities Activity Cost Patient registration 6,400 Verifying patient information 9,600 Assigning patients 12,800 Searching/waiting for doctor 8,000 Doctor exam 4,800 Waiting for transport 17,600 Transporting patients 16,000 Verifying lab orders 14,400 Searching for equipment 8,000 Incorrect labs 12,800 Lab tests 17,600 Counting supplies 19,200 Looking for supplies 8,000 Staff training 4,800 Total 160,000 Instructions 1. Prepare a Pareto chart of the ER activities. 2. Classify the activities into prevention, appraisal, internal failure, external failure, and other patient care activities. Classify the activities into value-added and non-value-added activities. 3. Use the activity cost information to determine the percentages of total ER costs that are prevention, appraisal, internal failure, external failure, and other patient care activities. 4. Determine the percentages of the total ER costs that are value-added and non-value-added. 5. Interpret the information.
eBook Question Content Area Activity-based costing for a service company Crosswinds Hospital plans to use activity-based costing to assign hospital indirect costs to the care of patients. The hospital has identified the following activities and activity rates for the hospital indirect costs: Activity Activity Rate Room and meals $219 per day Radiology $309 per image Pharmacy $50 per physician order Chemistry lab $91 per test Operating room $680 per
Question： A hospital uses a type of disinfectant for cleaning at an annual rate of 1000 bottles. The disinfectant normally costs the hospital $3 per bottle. The annual inventory holding cost is $0.80 per bottle and it costs $16 to place an order with the supplier. The supplier o§ers a 4% discount on orders of at least 400 bottles and a 7% discount for at least 800 bottles.Determine1. The hospitalís optimal order quantity and minimum total annual cost; 2. The number of orders per year.
Can you help with part 4 of this quesstion? Parts 1, 2, and 3 have been answered. Pleasant Stay Medical Inc. wishes to determine its product costs. Pleasant Stay offers a variety of medical procedures (operations) that are considered its “products.” The overhead has been separated into three major activities. The annual estimated activity costs and activity bases follow: ActivityBudgeted Activity CostActivity BaseScheduling and admitting$432,000 Number of patientsHousekeeping4,212,000 Number of patient daysNursing5,376,000 Weighted care unitTotal costs$10,020,000 Total “patient days” are determined by multiplying the number of patients by the average length of stay in the hospital. A weighted care unit (wcu) is a measure of nursing effort used to care for patients. There were 192,000 weighted care units estimated for the year. In addition, Pleasant Stay estimated 6,000 patients and 27,000 patient days for the year. (The average patient is expected to have a a little more than a…
Ready Hospital Supplies (RHS) trades in the buying and selling of supplies primarily targeting hospitals and private medical practitioners. During the COVID-19 pandemic, the business has experienced a rapid increase in demand and RHS is faced with the need for additional financing. You and your group members are the accounting associate supporting the credit request to Millionaire National Bank (MNB). The corporate banking head at MNB is requesting a full set of financial statements to ensure that granting the loan would be financially feasible during a period when many similar businesses are facing delinquency and foreclosures. Your head of finance has furnished you with the latest trial balance for RHS, along with other information relevant to the year under review and you are tasked to prepare the documents requested by MNB. Below is the trial balance which was extracted from the books of the business on June 30, the end of the company’s financial year. As a group, you are required…
Ready Hospital Supplies (RHS) trades in the buying and selling of supplies primarily targeting hospitals and private medical practitioners. During the COVID-19 pandemic, the business has experienced a rapid increase in demand and RHS is faced with the need for additional financing. You and your group members are the accounting associate supporting the credit request to Millionaire National Bank (MNB). The corporate banking head at MNB is requesting a full set of financial statements to ensure that granting the loan would be financially feasible during a period when many similar businesses are facing delinquency and foreclosures. Your head of finance has furnished you with the latest trial balance for RHS, along with other information relevant to the year under review and you are tasked to prepare the documents requested by MNB. Below is the trial balance which was extracted from the books of the business on June 30, the end of the company’s financial year. As a group, you are required…