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	$6,100.00
3	Verifying patient information	9,700.00
4	Assigning patients	12,600.00
5	Searching/waiting for doctor	8,000.00
6	Doctor	4,500.00
7	Waiting for transport	17,200.00
8	Transporting patients	15,800.00
9	Verifying lab orders	14,400.00
10	Searching for equipment	7,900.00
11	Incorrect labs	13,200.00
12	Lab tests	40,800.00
13	Counting supplies	29,100.00
14	Looking for supplies	6,900.00
15	Staff training	3,800.00
16	Total	$190,000.00

Required:

1.

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.

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.*

4.

Interpret the information.

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

Amount Descriptions

Appraisal

External failure

Internal failure

Non-value-added

Other patient care

Prevention

Value-added

. 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.

Activity	Activity Cost	Cost of Quality Classification	Value-Added/Non-Value-Added Classification
Patient registration	6,100
Verifying patient information	9,700
Assigning patients	12,600
Searching/waiting for doctor	8,000
Doctor	4,500
Waiting for transport	17,200
Transporting patients	15,800
Verifying lab orders	14,400
Searching for equipment	7,900
Incorrect labs	13,200
Lab tests	40,800
Counting supplies	29,100
Looking for supplies	6,900
Staff training	3,800
Total	$190,000

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
3
4
5
6
7	Total

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
3
4	Total

4. Interpret the information.

The ER has 28% of its total costs as _______________. __________________ represent 34% of the total costs.