Internet Exercises

www: IE16-21 Interpreting the Results of a Step Method Allocation Service department costs can be allocated to revenue-producing departments using the step method approach. However, how relevant are these costs for decision-making purposes? A short report concerning the costs at the University of Florida Health Science Center's Emergency Department is given on the web site gema.library.ucsf.edu:8081/Originals/SAEMabs/SA38.mhtmll

1.      What is the average cost of a patient-visit at the Emergency Department (ED) according to the step method allocation?

2.      How much cost could actually be saved at the Emergency Department by diverting a patient to a lower-cost facility?

IE16-22 Charging for Use of a Motor Pool The U.S. Department of Health and Human Services handles numerous grants and disbursements to government and other organizations. The department has developed guidelines for accounting for service department costs for organizations that are seeking funds. These guidelines are described on the web site http://www.hhs.gov/grantsnet/state/pt4.html in the document titled "Attachment C—Requirements For Cost Allocation Plans." Find Illustration 4-5 that describes how the costs of a motor pool should be charged to user departments. For example, the Public Health Department of the county might use one of the county's motor pool cars to transport a group of public health nurses to a training session in a nearby city.

1.      According to the Sample Central Service Cost Allocation Plan, how should user departments be charged for the use of vehicles? How does this method differ from the method described in this text?

2.      Are there any disadvantages to the method for charging for the use of motor pool vehicles that is recommended by the Department of Health and Human Services?