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Rosemont Case Help 2
Rosemont Case Help 2
Income Statement
For the Year Ended December 31, 1982
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
of patient Salaries Other Total
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
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
Cost Per visit (Total Cost/ No. of Patient) $22.65 $8.32 $92.20 $14.44
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
$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
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.
nd does not properly account for the cost incurred by each department.