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	$6,400.00
3	Verifying patient information	9,400.00
4	Assigning patients	12,800.00
5	Searching/waiting for doctor	8,000.00
6	Doctor exam	4,600.00
7	Waiting for transport	17,600.00
8	Transporting patients	15,900.00
9	Verifying lab orders	14,300.00
10	Searching for equipment	7,800.00
11	Incorrect labs	9,000.00
12	Lab tests	9,300.00
13	Counting supplies	16,900.00
14	Looking for supplies	5,200.00
15	Staff training	2,800.00
16	Total	$140,000.00

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.

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.

Activity	Activity Cost	Cost of Quality Classification	Value-Added/Non-Value-Added Classification
Patient registration	6,400
Verifying patient information	9,400
Assigning patients	12,800
Searching/waiting for doctor	8,000
Doctor exam	4,600
Waiting for transport	17,600
Transporting patients	15,900
Verifying lab orders	14,300
Searching for equipment	7,800
Incorrect labs	9,000
Lab tests	9,300
Counting supplies	16,900
Looking for supplies	5,200
Staff training	2,800
Total	$140,000

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 34% of its total costs as . represent 34% of the total costs.