Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Textbook Question
Chapter 27, Problem 4PA
Pareto chart and cost of quality report for a service company
The administrator of Liberty 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:
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.
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2. 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 hospltal services external to the ER for determining external failure costs. The
result of the activity analysis is summarized as follows:
Which of the following activity bases would be the most appropriate for food costs of a hospital?
a.quantity of prescriptions filled
b.how many MRI's are taken
c.number of nurses scheduled to work
d.number of patients who stay in the hospital
Which of the following costs are likely to be controllable by the chief of nursing in a hospital?a. Cost of medication administered.b. Cost of overtime paid to nurses due to scheduling errors.c. Cost of depreciation of hospital beds.
Chapter 27 Solutions
Financial And Managerial Accounting
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