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    Project Rosemont Hill Health Center

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    SANDEEP AGRAWAL
    The document provides financial information for Rosemont Hill Health Center for 1982, including revenue, expenses, expenses by department, and more detailed cost allocation across departments. It uses a step-down cost allocation method to assign costs from indirect cost pools to departments and calculate the average cost per patient visit for each department. This allows Rosemont Hill to determine that costs vary significantly by department and to charge fees that better reflect the actual costs of treating patients in each department.

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    © All Rights Reserved
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    Project Rosemont Hill Health Center

    Uploaded by

    SANDEEP AGRAWAL
    69 views9 pages
    The document provides financial information for Rosemont Hill Health Center for 1982, including revenue, expenses, expenses by department, and more detailed cost allocation across departments. It uses a step-down cost allocation method to assign costs from indirect cost pools to departments and calculate the average cost per patient visit for each department. This allows Rosemont Hill to determine that costs vary significantly by department and to charge fees that better reflect the actual costs of treating patients in each department.

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    308598137-Project-Rosemont-Hill-Health-Center.xlsx

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    The document provides financial information for Rosemont Hill Health Center for 1982, including revenue, expenses, expenses by department, and more detailed cost allocation across departments. It uses a step-down cost allocation method to assign costs from indirect cost pools to departments and calculate the average cost per patient visit for each department. This allows Rosemont Hill to determine that costs vary significantly by department and to charge fees that better reflect the actual costs of treating patients in each department.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    69 views9 pages

    Project Rosemont Hill Health Center

    Uploaded by

    SANDEEP AGRAWAL
    The document provides financial information for Rosemont Hill Health Center for 1982, including revenue, expenses, expenses by department, and more detailed cost allocation across departments. It uses a step-down cost allocation method to assign costs from indirect cost pools to departments and calculate the average cost per patient visit for each department. This allows Rosemont Hill to determine that costs vary significantly by department and to charge fees that better reflect the actual costs of treating patients in each department.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 9

    Rosemont Hill Health Center

    Income Statement
    For the Year Ended December 31, 1982

    Revenue from patient fees $ 690,900


    Other revenue $ 10,000
    Total Revenue $ 700,900

    Expense:
    Program services $ 470,000
    Utlities $ 20,000
    Laboratory $ 50,000
    General and administrative $ 184,000
    Total expenses $ 724,000
    Surplus (deficit) $ (23,100)
    Expenses and Patient Visits for 1982 By Department
    Expenses

    Number Salaries Other Total


    of patient
    visits
    Department
    Pediatrics 5000 $40,000 $16,000 $56,000
    Family Planning 10000 $10,000 $30,000 $40,000
    Adult medicine 2100 $60,000 $32,000 $92,000
    Nursing 4000 $54,000 $12,000 $66,000
    Mental Health 1400 $30,000 $16,000 $46,000
    Social Services 1500 $64,000 $16,000 $80,000
    Community health 2500 $10,000 $20,000 $30,000
    Dental 6400 $40,000 $20,000 $60,000
    Subtotal 32900 $308,000 $162,000 $470,000

    Administration $ 76,000.00 $ 4,000.00 $ 80,000.00


    Rent $ 72,000.00 $ 72,000.00
    Utilities $ 20,000.00 $ 20,000.00
    Laboratory Work $ 32,000.00 $ 18,000.00 $ 50,000.00
    Cleaning $ 12,000.00 $ 12,000.00
    Recordkeeping $ 14,000.00 $ 6,000.00 $ 20,000.00
    Total $430,000.00 $ 294,000 $ 724,000
    Number of paitent visit 32900
    Average cost per visit ($724,000 / 32900) $22
    Floor Space and Laboratory Usage, By Department
    Laboratory
    Floor Space (sq. ft.) Usage (hrs.
    lyr.)
    Department
    Pediatrics 1000 1000
    Family Planning 1300 200
    Adult medicine 1800 2400
    Nursing 300 100
    Mental Health 1000
    Social Services 500
    Community health 1100 100
    Dental 1000 200
    Administration 500
    Recordkeeping 300
    Laboratory 1200
    Total 10000 4000
    Rosemont Hill Health Center Step Down Method
    Basis of
    Family Adult
    appropriation/ Pediatrics Nursing
    Planning medicine
    Reappropriation
    General Information
    Floor Space (in sq. ft) 1000 1300 1800 300
    Laboratory Usage (Hrs/Year) 1000 200 2400 100
    Number of Patient visits 5000 10000 2100 4000

    Direct Costs
    Salaries $40,000 $10,000 $60,000 $54,000
    Other Costs $16,000 $30,000 $32,000 $12,000
    Total Costs after allocation $56,000 $40,000 $92,000 $66,000

    Appropriation of Cost
    Rent Floor Space $7,200 $9,360 $12,960 $2,160
    Utlities Floor Space $2,000 $2,600 $3,600 $600
    Cleaning Floor Space $1,200 $1,560 $2,160 $360
    Total Cost after Appropriation $66,400 $53,520 $110,720 $69,120

    Reappropriation of Cost
    Administration Salary $9,627 $2,407 $14,441 $12,997
    Laboratory Usage $17,545 $3,509 $42,109 $1,755
    Recordkeeping No. of Patients $4,026 $8,052 $1,691 $3,221
    Nursing Working Note 1 $9,000 $9,000 $18,000 -$36,000
    Social Service Bachelor's Degree $2,667 $2,667 $2,667 $2,667
    Social Service 2 MSW's $4,000 $4,000 $4,000 $4,000

    Total Costs $113,265 $83,154 $193,627 $57,758

    Cost Per visit (Total Cost/ No. of Patient) $22.65 $8.32 $92.20 $14.44

    Social Services Department Allocation:


    In the social service department, there are 3 employees, two MSW's and one bachelor's degree social worker.
    The bachelor's degree social worker divides his time equally among all departments except dental,so, his salary of $16,000 is di

    The two MSW spend half of their time in other departments except dental.
    50% of their costs is divide and allocated into other departments.
    Mental Social Community Record- Laboratory
    Dental Administration Rent
    Health Services health keeping Work

    1000 500 1100 1000 300 1200 500 10000


    100 200 4000
    1400 1500 2500 6400

    $30,000 $64,000 $10,000 $40,000 $14,000 $32,000 $76,000


    $16,000 $16,000 $20,000 $20,000 $6,000 $18,000 $4,000 $72,000
    $46,000 $80,000 $30,000 $60,000 $20,000 $50,000 $80,000 $72,000

    $7,200 $3,600 $7,920 $7,200 $2,160 $8,640 $3,600 -$72,000


    $2,000 $1,000 $2,200 $2,000 $600 $2,400 $1,000
    $1,200 $600 $1,320 $1,200 $360 $1,440 $600
    $56,400 $85,200 $41,440 $70,400 $23,120 $62,480 $85,200 $0

    $7,220 $15,403 $2,407 $9,627 $3,369 $7,702 -$85,200


    $0 $0 $1,755 $3,509 $0 -$70,182
    $1,127 $1,208 $2,013 $5,153 -$26,489
    $0 $0 $0 $0
    $2,667 -$16,000 $2,667 $0
    $4,000 -$24,000 $4,000 $0

    $71,414 $61,811 $54,281 $88,689 $0 $0 $0

    $51.01 $41.21 $21.71 $13.86

    o, his salary of $16,000 is divided into 6 parts.


    Utilities Cleaning

    $20,000 $12,000
    $20,000 $12,000

    -$20,000
    -$12,000
    $0 $0
    Answer to Question 2:
    This method that was used by the accountant not good enough as the charges of treating the patients for all departments should
    Each department has a different level of complex and varied costs as such each department's patient should also be charged diff

    Through the implemented step down method, the center can now have better details about total costs for each department and c

    Department Cost per Visit


    Pediatrics
    Family $22.65
    Planning
    Adult $8.32
    medicine $92.20
    Nursing
    Mental $14.44
    Health
    Social $51.01
    Services
    Community $41.21
    health $21.71
    Dental $13.86

    The per visit costs is lowest for Family Planning Department and highest for Adult Medicine.

    Before this analysis, RHHC has been charging uniform prices for all patients which is inaccurate and does not properly account

    RHHC should apply this method of costing so that they can charge more accurate fees to the patients.
    s for all departments should not be equal.
    t should also be charged differently.

    ts for each department and cost for each patient visit.

    nd does not properly account for the cost incurred by each department.

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