Explain about the healthcare company

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Reference no: EM132634467

A healthcare company specializes in hip, knee and shoulder replacement operation, known as surgical procedures. As well as providing these surgical procedures the company offers pre- operation and post-operation in-patient care, in a fully equipped hospital, for those patients who will be undergoing surgical procedures.

Surgeons are paid a fixed fee for each surgical procedure they perform and an additional amount for any follow-up consultations. Post procedure follow up consultations are only undertaken if there are any complications in relation to the surgical procedure. There is no additional fee charged to patients for any follow up consultations. All other staffs are paid annual salaries.

The company's existing costing system uses a single overhead rate, based on revenue, to charge the costs of support activities to the procedures. Concern has been raised about the inaccuracy of procedure costs and the company's accountant has initiated a project to implement an activity-based costing system.

Question 1: Explain about the healthcare company

Reference no: EM132634467

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