Case 3-Stephanie Ramirez.xls - CASE 3 Student Version Copyright 2014 Health Administration Press BIG BEND MEDICAL CENTER Cost Allocation Concepts This

Case 3-Stephanie Ramirez.xls - CASE 3 Student Version...

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CASE 3Student Version8/13/13BIG BEND MEDICAL CENTERCost Allocation ConceptsThis case focuses on cost allocation concepts, specifically the fairness and incentives created bya new allocation system applied to a department that is moving to a new, stand-alone facility.The primary thrust of the case is qualitative rather than quantitative, but this model can be usedto compare results under alternative allocation schemes. The model consists of a complete base case analysis—no changes need to be made to the existinMODEL-GENERATED DATA section. However, in the student version all values in the INPUT DATsection have been replaced with zeros. Thus, students must enter the appropriate values into theand the base case solution will appear. Note that the model does not contain any uncertaintymust create their own graphics output (charts) as needed to present their results.INPUT DATA:KEY OUTPUT:Dialysis Center Data:Dialysis CtrOutpatient CtrRevenues:Facilities allocation ($)$ 300,000 $ 1,600,000 Hemodialysis program$ 1,300,000 Per square foot$ 15.00 $ 16.00 Peritoneal program600,000 Gen overhead alloc.270,000 2,000,000 Pharmaceutical supplies800,000 Per revenue $10.0%10.0%Total revenues$ 2,700,000 Total indirect costs$ 570,000 $ 3,600,000 Direct expenses:Salaries and benefits$ 900,000 Net profit$ 30,000 $ 4,108,556 Pharmaceutical supplies800,000 Other supplies100,000 Percent of rev1.1%20.5%Utilities80,000 Equipment lease expense120,000 Other expenses100,000 Total direct expenses$ 2,100,000 Net gain (loss) beforeindirect expenses$ 600,000 Indirect (overhead) expenses:Facilities costs$ 300,000 General overhead270,000 Total overhead costs$ 570,000 Net profit$ 30,000 Copyright 20Administratired

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