Question

BRIE Norinwest Hospital is a full-service hospital that provides everything from major surgery and emergency room care to outpatient clinics. Required: For each cost incurred at Northwest Hospital, indicate whether it would most likely be a direct cost or an indirect cost of the specified cost object by placing an X in the appropriate column. FEXERCISEI? Identifying Direct and Indirect Costs[L07] El Direct-,.. ?ndirect Cost Cost Cost Cost Object Ex. Catered food served to patients 1. The wages of pediatric nursesThe pediatric department articular patient ? particular:patient The pediatric department A particular patient 2. Prescription drugs 3-He ting-theh spital de thépèdiatric department ai . 4. The salary of the head of pediatricsT ? 5. The salary of the head of pediatricsApaticular pediatic patient 6. Hospital chaplain's salary 7. Lab tests by outside contractoA particülar patient ests by outside contractorAparticular department

Answer 1

COST OBJECT Pediatric department A particular patient The pediatric department The pediatric department A particular pediatric patient A aprticular patient A aprticular patient A particular department Indirect COST 1 Wages of pediatric nurses 2 Prescription drugs 3 Heating the hospital 4 Salary of head of pediatric 5 Salary of head of pediatric 6 Hospital chaplains Salary 7 Lab tests by outside contractor 8 Lb test by outside contractor Direct Appropriate costs are marked in yellow Direct costs are those costs which a directly attributable to a patient or a department whereas indirect costs are those costs which are not directly attributable, they are a result of overhead costs Indirect costs are difficult to assign to a specific patient or a department On the basis of these definitions, above metioned costs are appropriately classified into direct and indirect costs