Associate Level Material HCA/270
Cost Classifications
Consult Ch. 6 Ch. 7 of Health Care Finance: Basic Tools for Nonfinancial Managers (3rd ed.) and other sources to complete the form. This worksheet requires you to match the definitions and examples of types of cost and the types of centers where costs occur.
Part 1: For each term in Column A, select the correct definition from Column B. Write the corresponding letter of the definition next to the term.
Column A |
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F | 1. Indirect costs | |
A | 2. Direct costs | |
D | 3. Fixed costs | |
I E C B H G | 4. Variable costs 5. Step-fixed costs 6. Responsibility centers 7. Revenue centers 8. Cost centers 9. Shadow cost centers | |
Column B – Definitions
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Part II: For each real-world example, select the correct term from Column A. Write the corresponding letter of the real-world example in Column B next to the term.
Column A |
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D | 1. Indirect costs |
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C | 2. Direct costs | ||
B | 3. Fixed costs | ||
| 4. Variable costs 5. Step-fixed costs 6. Responsibility centers 7. Revenue centers 8. Cost centers 9. Shadow cost centers | ||
Column B – Real-World Examples A. A subunit of a larger organization that is responsible for some type of budget, such as the payroll department or courier service |
B. Shares of depreciation, administration division, or laundry service |
C. Administration, human resources, or housekeeping |
D. Utility bill, supplies, or maintenance |
E. Nursing care, food consumed, drugs administered
F. Hospital cafeteria, gift shop, or parking ramp G. Depreciation of hospital equipment H. Building loan payment, building insurance, or cable or internet service I. The nurse-to-patient ratio on the cardiac unit is one to three patients. There are four nurses scheduled for 12 patients. During the second shift, three more patients are admitted. The nurse manager calls in a fifth nurse. |
Part III: Select two choices from Part II and explain why they meet that cost classification.