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UNIT CODE: CMA202 UNIT NAME: COST ACCOUNTING Assignment One Information Semester 1 2013 Assessment 35% Submission Requirements. This assignment may be submitted at or before Friday Study Week 10. Assignments are to be submitted by one of the following means; DO NOT LODGE BY FAX nor EMAIL nor at LECTURER'S OFFICE KEEP A COPY · The assignment must be lodged on or before the due date indicated in the assignment details. 1 · Submit your Assignment using either a PDF or MSWord file format . · The assignment submitted must be accompanied by a signed student declaration as provided for on 2 the CMA202 Assignment Cover Sheet templates (as provided on Learnline ). · The assignment submitted must include the completed coversheet for this unit (as provided on 1 Learnline), placed at the front of the document submitted. (Failure to include a signed coversheet may result in your assignment lodgement being rejected.) · The assignment must conform to the requirements set out in this assignment · The assignment must be lodged online via the CMA202 Learnline Assignment Lodgement link on the CMA202 Learnline site. Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs. Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected. · DO NOT LODGE VIA EMAILor FAX - assignments lodged by email or fax will not be accepted. · KEEP A COPY - Ensure you have a copy of the assignment lodged. If you have submitted assessment work electronically please make sure you have a backup copy. · Assignment lodgements will be acknowledged by the lecturer on the CDU CMA202 Learnline site within 72 hours of receipt. It is the students responsibility to ensure that the lecturer has received (and acknowledged receiving) the assignment. 1 Instructions for creating PDF documents and/or combining documents of different...

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David · Accepted Answer

SOLUTION 
a) MEEI was using per diem system for identifying cost of hospital. It was to divide total 
budgeted cost by total budgeted patient days. The per diem rate was calculated by adding 
5% mark up to the per diem cost. 
The per diem cost system was inept and outdated. This method failed to report the 
components of patient cost and poses high burden on the patients. It leads company to 
ineffective and cumbersome accounting methods. This system leads to more cost which 
was ultimately born by patients or payers. 
The new costing method i.e. Activity Based Costing System, is dependent upon two facts: 
1 All day’s care are not equivalent  
2 The cost incurred for patient care includes three activities hospitalization, routine daily 
cost and intensive nursing care. 
 This system would isolate the different element of cost of hospital. By segregating the cost 
into different activities, more equitable cost system would be developed. The information 
provided by this intensive system would help management to improve the facilities 
utilization. 
The system is cost measurement for productivity. This system helps management in 
knowing the various activities that contributed to the total cost of hospital. It would also tell 
as to how many clinical units required for the entire range of procedures conducted in the 
hospitals. It has also calculated the nursing activities, as to the cost and staff required. The 
major advantage of new costing system over old per diem system is hospitalization charge; 
it majorly benefits the patients who stay for a short period. As in old system irrespective of 
the patient stay, cost was charged on the basis of patient days. 
In respect of patient mix,

Solving a case study Document Preview: UNIT CODE: CMA202 UNIT NAME: COST ACCOUNTING Assignment One Information Semester 1 2013 Assessment 35% Submission Requirements. This assignment may be submitted...

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