determine the best cost driver. determine the best cost driver.
Dr. Pat Combs is the head a large conglomerate of hospitals, Acuity Hospital Association. Dr. Combs is converting the company to an Activity Based Costing system for internal reporting. Your team has been asked to assist in the process. Your task is to present to Dr. Combs your conclusion on the best cost driver (and the rate)to determine Medical Overhead costs associated with a patient’s visit. You will submit a memo and a visual presentation to Dr. Combs.
You have been provided Medical Overhead cost history from 2009 to 2014 (Excel: Medical1 and Medical2) for the company. You have also been provided with information about the type of medication used, the amount of medication used, the level of nursing care (1- technician level to 4-skilled & specialized), the length of the stay, the doctors’ fee, and the type of visit (Medical, Surgical or Other). Your task is to determine the best cost driver and the associated rate to best estimated Medical Overhead costs for a patient visit. It can be a single driver ora combination of multiple drivers.
You must conduct your analysis and generate your visual presentation from Excel (Charts in Excels). Your electronic submission should include a Word file for your memo and the Excel file used for the analysis. You may use other programs as part of your analysis, but any conclusions must be supported by your work in Excel.
The submissions will be evaluated on how well the memo and the visual presentation convey the reasoning for why your chosen cost driver (or combinationof cost drivers) is the best choice for predicting Medical Overhead costs.
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