A partial list of Cottonwood Medical Center\'s costs is provided below. 1. What

Question

A partial list of Cottonwood Medical Center's costs is provided below.

1. What would be Cottonwood Medical Center's most logical definition for the final cost object?
SelectService levelHospital levelPatient levelItem 1

2. Identify whether each of the costs is to be classified as a direct cost or an indirect cost. For purposes of classifying each cost as direct or indirect, use the patient as the cost object.

Costs Classification a. Depreciation of X-ray equipment. INDIRECT OR DIRECT b. Salary of the nutritionist. INDIRECT OR DIRECT c. Cost of advertising hospital services on television. INDIRECT OR DIRECT d. Cost of improvements on the employee parking lot. INDIRECT OR DIRECT e. Cost of blood tests. INDIRECT OR DIRECT f. Operating room supplies used on patients (catheters, sutures, etc.). INDIRECT OR DIRECT g. Cost of patient meals. INDIRECT OR DIRECT h. Cost of X-ray test. INDIRECT OR DIRECT i. Depreciation on patient rooms. INDIRECT OR DIRECT j. Overtime incurred in the Patient Records Department due to a computer failure. INDIRECT OR DIRECT k. Cost of maintaining the staff and visitors' cafeteria. INDIRECT OR DIRECT l. General maintenance of the hospital. INDIRECT OR DIRECT m. Utility costs of the hospital. INDIRECT OR DIRECT n. Cost of drugs used for patients. INDIRECT OR DIRECT o. Training costs for nurses. INDIRECT OR DIRECT p. Doctor's fee. INDIRECT OR DIRECT q. Cost of laundry services for operating room personnel. INDIRECT OR DIRECT r. Nurses' salaries. INDIRECT OR DIRECT s. Salary of intensive care personnel. INDIRECT OR DIRECT t. Cost of intravenous solutions used for patients. INDIRECT OR DIRECT u. Cost of new heart wing. INDIRECT OR DIRECT

Explanation / Answer

a. Depreciation of X-ray equipment. Indirect Not Directly related with the patient b. Salary of the nutritionist. Indirect Not Directly related with the patient c. Cost of advertising hospital services on television. Indirect Not Directly related with the patient d. Cost of improvements on the employee parking lot. Indirect Not Directly related with the patient e. Cost of blood tests. Direct Directly related with the patient f. Operating room supplies used on patients (catheters, sutures, etc.). Direct Directly related with the patient g. Cost of patient meals. Direct Directly related with the patient h. Cost of X-ray test. Direct Directly related with the patient i. Depreciation on patient rooms. Direct Directly related with the patient j. Overtime incurred in the Patient Records Department due to a computer failure. Indirect Not Directly related with the patient k. Cost of maintaining the staff and visitors' cafeteria. Indirect Not Directly related with the patient l. General maintenance of the hospital. Indirect Not Directly related with the patient m. Utility costs of the hospital. Indirect Not Directly related with the patient n. Cost of drugs used for patients. Direct Directly related with the patient o. Training costs for nurses. Indirect Not Directly related with the patient p. Doctor's fee. Indirect Not Directly related with the patient q. Cost of laundry services for operating room personnel. Indirect Not Directly related with the patient r. Nurses' salaries. Indirect Not Directly related with the patient s. Salary of intensive care personnel. Direct Directly related with the patient t. Cost of intravenous solutions used for patients. Direct Directly related with the patient u. Cost of new heart wing. Direct Directly related with the patient

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