CMA Foundation · Fundamentals of Financial and Cost Accounting · Cost, Cost Centre, Cost Unit and Cost Drivers
A hospital in Chennai wants to measure the cost of its in-patient ward services. Which of the following is the most appropriate composite cost unit for this purpose?
The patient-day is the most appropriate cost unit for in-patient ward services because it measures the service delivered to patients over time. The other options count inputs or single items, such as beds, doctors or medicine strips, and do not capture the service output.
- APatient-dayCorrect
- BPer bed purchased
- CPer doctor employed
- DPer medicine strip issued
Explanation
Service-sector costs such as hospital ward costs are measured with a unit that reflects the service delivered over time. The patient-day is the standard unit for hospitals. The other options measure inputs or isolated items, not the service provided.
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