Discussion of Reported Costs and Variances from the Two Systems

9. Consider SHHs need to control its skyrocketing costs, Jacks discussion with experienced nurses regarding their use of hospital resources, and the reported costs that you calculated from each cost system. Based on these considerations, which cost system (current, vital signs, or both ) should Jack choose? Briefly explain the reasoning behind your choice.

a. _Vital signs or Current ___ costing system should more accurately allocate costs to service lines because its cost allocation base.

b. __both, current or vital signs____uses only one cost driver ___both are equally, vital signs are more or current is more________ and cost effective.

c. The more accurate ___current or vital signs__________ system should generate a more accurate estimate of the cost per nursing hour, which affects the budgeting process, because the portion of costs allocated to each service line, ER.