Rosemont Hill Health Center

Income Statement
For the Year Ended December 31, 1982

Revenue from patient fees $ 690,900

Other revenue $ 10,000
Total Revenue $ 700,900

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 Salaries Other Total

of patient
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

Administration $ 76,000.00 $ 4,000.00 $ 80,000.00

Rent $ 72,000.00 $ 72,000.00
Utilities $ 20,000.00 $ 20,000.00
Laboratory Work $ 32,000.00 $ 18,000.00 $ 50,000.00
Cleaning $ 12,000.00 $ 12,000.00
Recordkeeping $ 14,000.00 $ 6,000.00 $ 20,000.00
Total $430,000.00 $ 294,000 $ 724,000
Number of paitent visit 32900
Average cost per visit ($724,000 / 32900) $22
Floor Space and Laboratory Usage, By Department
Laboratory
Floor Space (sq. ft.) Usage (hrs.
lyr.)
Department
Pediatrics 1000 1000
Family Planning 1300 200
Adult medicine 1800 2400
Nursing 300 100
Mental Health 1000
Social Services 500
Community health 1100 100
Dental 1000 200
Administration 500
Recordkeeping 300
Laboratory 1200
Total 10000 4000
Rosemont Hill Health Center Step Down Method
Basis of
Family Adult
appropriation/ Pediatrics Nursing
Planning medicine
Reappropriation
General Information
Floor Space (in sq. ft) 1000 1300 1800 300
Laboratory Usage (Hrs/Year) 1000 200 2400 100
Number of Patient visits 5000 10000 2100 4000

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

Total Costs $113,265 $83,154 $193,627 $57,758

Cost Per visit (Total Cost/ No. of Patient) $22.65 $8.32 $92.20 $14.44

Social Services Department Allocation:

In the social service department, there are 3 employees, two MSW's and one bachelor's degree social worker.
The bachelor's degree social worker divides his time equally among all departments except dental,so, his salary of $16,000 is di

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

1000 500 1100 1000 300 1200 500 10000

100 200 4000
1400 1500 2500 6400

$30,000 $64,000 $10,000 $40,000 $14,000 $32,000 $76,000

$16,000 $16,000 $20,000 $20,000 $6,000 $18,000 $4,000 $72,000
$46,000 $80,000 $30,000 $60,000 $20,000 $50,000 $80,000 $72,000

$7,200 $3,600 $7,920 $7,200 $2,160 $8,640 $3,600 -$72,000

$2,000 $1,000 $2,200 $2,000 $600 $2,400 $1,000
$1,200 $600 $1,320 $1,200 $360 $1,440 $600
$56,400 $85,200 $41,440 $70,400 $23,120 $62,480 $85,200 $0

$7,220 $15,403 $2,407 $9,627 $3,369 $7,702 -$85,200

$0 $0 $1,755 $3,509 $0 -$70,182
$1,127 $1,208 $2,013 $5,153 -$26,489
$0 $0 $0 $0
$2,667 -$16,000 $2,667 $0
$4,000 -$24,000 $4,000 $0

$71,414 $61,811 $54,281 $88,689 $0 $0 $0

$51.01 $41.21 $21.71 $13.86

o, his salary of $16,000 is divided into 6 parts.

Utilities Cleaning

$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

Department Cost per Visit

Pediatrics
Family $22.65
Planning
Adult $8.32
medicine $92.20
Nursing
Mental $14.44
Health
Social $51.01
Services
Community $41.21
health $21.71
Dental $13.86

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.

ts for each department and cost for each patient visit.

nd does not properly account for the cost incurred by each department.