Based on the determination of the excess or deficiency of reimbursement to activity cost, indicate which procedure cost is too high. Hospital management has decided to further investigate the nursing effort. Determine the weighted care units per patient days for each procedure. Round to one decimal place. Procedure A __________ weighted care units per patient day Procedure B __________ weighted care units per patient day Procedure C __________ weighted care units per patient day
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
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:
|
Activity |
Budgeted Activity Cost |
Activity Base |
|
|
$432,000 |
Number of patients |
|
Housekeeping |
4,212,000 |
Number of patient days |
|
Nursing |
5,376,000 |
Weighted care unit |
|
Total 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 four-day stay in the hospital.)
During a portion of the year, Pleasant Stay collected patient information for three selected procedures, as follows:
|
Activity-Base Usage |
||
|
Procedure A |
||
|
Number of patients |
280 |
|
|
Average length of stay |
x 6 |
days |
|
Patient days |
1,680 |
|
|
Weighted care units |
19,200 |
|
|
Procedure B |
||
|
Number of patients |
650 |
|
|
Average length of stay |
x 5 |
days |
|
Patient days |
3,250 |
|
|
Weighted care units |
6,000 |
|
|
Procedure C |
||
|
Number of patients |
1,200 |
|
|
Average length of stay |
x 4 |
days |
|
Patient days |
4,800 |
|
|
Weighted care units |
24,000 |
Private insurance reimburses the hospital for these activities at a fixed daily rate of $406 per patient day for all three procedures.
Required:
- Determine the activity rates.
|
Activity |
Activity Rate |
|
|
Scheduling and admitting |
$ |
per patient |
|
Housekeeping |
$ |
per pd |
|
Nursing |
$ |
per wcu |
- Determine the activity cost for each procedure.
|
Activity |
Total Activity |
|
Procedure A |
$ |
|
Procedure B |
$ |
|
Procedure C |
$ |
- Determine the excess or deficiency of reimbursements to activity cost.
|
Activity |
Excess (deficiency) of |
|
Procedure A |
$ |
|
Procedure B |
$ |
|
Procedure C |
$ |
- Based on the determination of the excess or deficiency of reimbursement to activity cost, indicate which procedure cost is too high.
Hospital management has decided to further investigate the nursing effort. Determine the weighted care units per patient days for each procedure. Round to one decimal place.
Procedure A __________ weighted care units per patient day
Procedure B __________ weighted care units per patient day
Procedure C __________ weighted care units per patient day
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