Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

. Sprint 7:30 PM @ 100% + Apply ABC/Costing - Cost Managem.... Offline Mode: Content may be out of date Bh Barbara Hordis Edited 8/24/19,5:26

image text in transcribed
image text in transcribed
image text in transcribed
. Sprint 7:30 PM @ 100% + Apply ABC/Costing - Cost Managem.... Offline Mode: Content may be out of date Bh Barbara Hordis Edited 8/24/19,5:26 PM (This exercise is a bit dated. Just go with the concepts, please. After all, it was an analysis like this, decades ago, that led to the changes in operations at hospitals and other service industries.) Hope Hospital performs diagnostic imaging services for patients admitted to the hospital. The process consists of the following activities with their associated activity costs (personnel costs only): Imaging Process Activities Activity Cost $22,000 15,000 75,000 15,000 Prepare patient (radioactive tracer injection) Move patient to Imaging Department Conduct imaging Move patient back to room Doctor dictates diagnoses via tape recorder Transcribe report to hardcopy File and retrieve report Total cost 50,000 18,000 45.000 $240,000 Add Reply . Sprint 7:30 PM @ 100% Apply ABC/Costing - Cost Managem... Offline Mode: Content may be out of date During the period, the hospital planned to perform 1,500 diagnostic images. In an effort to become more cost efficient, the hospital made some changes to this process. First, a policy was established that requires less critical procedures to be imaged prior to surgery on an outpatient basis. Second, the hospital purchased a digital voice recognition system that can automatically transcribe the doctor's voice into an electronic report. This report than can be electronically stored and retrieved by doctors in the area. These two changes are expected to have the following impact: a) It is estimated that 60% of the patients will use imaging services on an outpatient basis under the new policy. (Outpatients do not have to be moved to the Imaging Department or back to their rooms.) b) The new voice recognition technology will eliminate all of the transcription activity and 80% of the filing and retrieval activity. c) By scheduling patients for outpatient service, the Imaging Department will be able to use the imaging suites 20% more efficiently. Required: 1) Determine the process cost per image under the current process. Add Reply now y TWITTER OVODEZ * shared a Tweet with you Offline Mode: Content may be out of date a) It is estimated that 60% of the patients will use imaging services on an outpatient basis under the new policy. (Outpatients do not have to be moved to the Imaging Department or back to their rooms.) b) The new voice recognition technology will eliminate all of the transcription activity and 80% of the filing and retrieval activity. c) By scheduling patients for outpatient service, the Imaging Department will be able to use the imaging suites 20% more efficiently. Required: 1) Determine the process cost per image under the current process. 2) Determine the personnel process cost under the proposed process by applying the changes (a, b, c) to the existing costs. 3) Determine the personnel process cost per image under the proposed process by dividing the total revised cost by the number of images. 4) Comments? Interpret your results. What do they mean? Add Reply

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Auditing An Integrated Approach

Authors: Richard Cascarino

3rd Edition

1485110599, 978-1485110590

More Books

Students also viewed these Accounting questions