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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

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:

1

Activities

Activity Cost

2

Patient registration

$6,200.00

3

Verifying patient information

9,500.00

4

Assigning patients

12,700.00

5

Searching/waiting for doctor

8,000.00

6

Doctor exam

4,700.00

7

Waiting for transport

17,500.00

8

Transporting patients

16,100.00

9

Verifying lab orders

14,400.00

10

Searching for equipment

7,900.00

11

Incorrect labs

8,100.00

12

Lab tests

24,300.00

13

Counting supplies

22,500.00

14

Looking for supplies

4,900.00

15

Staff training

3,200.00

16

Total

$160,000.00

Required:
2. 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.*
3. Determine the percentages of the total ER costs that are value- and non-value-added.*

2. 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. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

1

Quality Cost Classification

Activity Cost

Percent of Total Department Cost

2

Prevention

3

Appraisal

46400

29.0

4

Internal Failure

20800

13.0

5

External Failure

25600

16.0

6

Other Patient Care

7

Total

160000

100

3. Determine the percentages of the total ER costs that are value- and non-value-added. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

1

Activity Cost

Percent of Total Department Cost

2

Value- Added

3

Non-value-added

4

Total

100%

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