CA Intermediate · Cost and Management Accounting · Service Costing
A hospital's cost accountant wants to compare the cost of running its in-patient ward across months with varying occupancy. Which composite cost unit is most appropriate for a hospital ward?
The most appropriate cost unit for an in-patient hospital ward is the patient-day, since the service consumed is the number of days patients occupy beds. Transport units such as tonne-kilometre or passenger-kilometre relate to moving goods or people and do not suit hospitals.
- APatient-dayCorrect
- BBed-kilometre
- CTonne-kilometre
- DPassenger-kilometre
Explanation
Hospitals use the patient-day (or bed-day) as the cost unit for ward services. Tonne-kilometre, passenger-kilometre and bed-kilometre are transport-type units and do not measure hospital service output.
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