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CMA Final · Cost and Management Audit · Audit of Different Service Organisations

In the audit of a hospital as a service organisation, which of the following is the most appropriate cost unit for measuring the cost of in-patient services?

The most appropriate cost unit for in-patient services in a hospital is cost per occupied bed-day. It captures the volume of care delivered over time, whereas pharmacy bills, payroll headcount or floor area only measure support activities or inputs rather than the service itself.

  1. ACost per bed-day occupiedCorrect
  2. BCost per pharmacy bill raised
  3. CCost per employee on payroll
  4. DCost per square metre of building area

Explanation

Hospitals deliver in-patient care over time, so the standard composite cost unit is cost per occupied bed-day. The other measures relate to support activities, staffing or space and do not reflect the volume of patient care delivered. Pharmacy bills are only a part of the service.

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