MANAGEMENT ACCOUNTING IN A DYNAMIC ENVIRONMENT by CHERYL S. MCWATTERS & JEROLD L. ZIMMERMAN

MANAGEMENT ACCOUNTING IN A DYNAMIC ENVIRONMENT by CHERYL S. MCWATTERS & JEROLD L. ZIMMERMAN

Author:CHERYL S. MCWATTERS & JEROLD L. ZIMMERMAN
Language: eng
Format: epub
Publisher: Routledge


General administration

Number of patients

Occupancy

Number of examination rooms

Hygienists

Hours used

Nurses

Hours used

Radiography

Number of x-ray and digital-imaging patients

Reception

Number of patients

These choices are based partly on recognizing the cost of using common resources and partly on achieving the goal of good patient care. For example, insurance is a major general administration cost and is closely related to the number of patients seen by the dentist. The number of examination rooms is used as an allocation base to discourage dentists from tying up too many examination rooms while patients wait for them. Each dentist has the choice of how many examination rooms to reserve for his or her patients. The number of radiography patients, rather than the number of x-rays or digital images, is used as an allocation base for the radiography department due to the fixed cost of getting the patient prepared for these treatments. Moreover, the clinic does not want to skimp on the number of x-rays or digital images, as they can be used to detect problems early. Under the current system, however, the incremental cost of another x-ray to the dentist is zero, so dentists will tend to have too many x-rays taken of a particular patient.

The use of nurses, hygienists, and receptionists is a problem at CSD. The allocation bases tend to encourage dentists to use the reception staff more and to use the nurses and hygienists less, because the allocated costs of using the latter increases by hour of use. Under this system, there is no incremental cost to the dentists of using reception staff to perform certain tasks, such as explaining treatment plans and options to patients. Given that the salaries of nurses and hygienists are greater than those of receptionists, the dentists prefer to substitute some work performed by nurses and hygienists with that of receptionists. This substitution could have a negative effect on patient care and their perception of CSD’s services.



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