Problem Set 7

Problem Set 7 - 7 You are the manager of the intensive care...

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HPM 340: Foundations of Health Care Financial Management Fall 2009 Problem Set 7 1. Gapenski, Chapter 6 – Problem 1 2. Gapenski, Chapter 6 – Problem 2 3. Gapenski, Chapter 6 – Problem 3 4. Gapenski, Chapter 6 – Problem 4 5. Gapenski, Chapter 6 – Problem 5 Note: In all allocation problems (for example, problem 3, part (b)), you may use an allocation table like the one in the text, or a table like the one presented in class. 6. The order in which support department costs are allocated (i.e., which department’s costs get allocated first, second, third, etc.) matters for the step-down method of allocation but not for the direct method of allocation. Briefly explain why this is true.
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Unformatted text preview: 7. You are the manager of the intensive care unit at City General Hospital. You are paid in part based on the financial performance of your unit. Assume City General allocates support department costs to patient service departments using the direct method of allocation. If your goal is to maximize your control over the financial performance of your unit (and therefore your compensation), you will be most interested in: a. Cost pools b. Allocation basis c. Allocation sequence Briefly explain your answer. Problem Set 7 must be completed in EXCEL and submitted to Blackboard by 2 p.m. on Tuesday, November 24 th , 2009....
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  • Spring '10
  • Reiter
  • Financial Management Fall, allocation problems, allocation table, Allocation sequence, City General Hospital

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