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| Topic: |
Business
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| Number of pages / Number of words: |
7 / 1827 |
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The logic of ABC systems is that more finely structured costs in the cost pool along with their cost drivers lead to more accurate costing of activities.
Presently at Western Dialysis, the existing cost system is the traditional costing system, under which both the treatments were categorized as a single category- dialysis treatment; and the total service costs were allocated based on a cost-based reimbursement program; as a consequence both the procedures seem to be profitable...
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Therefore under the ABC costing system the two categories of general overhead and the nursing resource will be decomposed into their subjective cost pools and drivers. The analysis will be based on projecting income statements under these two alternatives and calculating individual profitability of the two treatments...
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