• Health Policy and Management
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• v.8 no.2
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• pp.88-109
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• 1998

The main purpose of this study is to compare the traditional cost system and ABC(Activity Based Cost) system of clinical laboratory department in a hospital. The study subject was 296 services in clinical laboratory from March, 1997 to August, 1997. In a new costing system, cost for a lab test consist of direct cost element, activity based cost element, and allocated common cost element. In a traditional cost system, cost elements included direct cost element and indirect cost allocated based on test volumes The major findings of this research were as follows. 1. In the application of ABC system, total cost was analyzed as follows. Direct cost was 39.3% of total cost. Activity cost and allocation were 20.9% and 39.8%, respectively. The results of analysis to use traditional cost system were as follows. Direct cost was 39.3% and it was as same as the result of direct cost of ABC system. Indirect cost was 60.7%. 2. Activities of clinical laboratory of subject hospital were registration, pre-test operation, test, test result handling, delivery, culture, post-test operation, technical support, management support, and educational support. 3. The differences of the case of higher number of test case being carried out, the cost of ABC system was lower than the cost of traditional cost system. Otherwise in the case of lower number of test case being carried out, the rests have not been appropriately evaluated, and effective management were needed in clinical laboratory.

• IE interfaces
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• v.20 no.3
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• pp.395-406
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• 2007

In the telecommunication industry, estimation of the cost of network facilities is very important since depreciation cost of the facilities accounts for a large portion of the product cost. Moreover, cost estimation in the industry becomes more difficult because of increasing indirect cost upon digital convergence, expanding multi-purpose facilities, complexity of service product, etc. Nevertheless, not much seem to have been done in improving estimation methodology of the cost of network facilities. As a result, the quality of cost information on network facilities has deteriorated, and now even decision-makers in the industry dismiss the information. Recently, two major telecommunication companies adopted a new network cost estimation method to deal with the issue. In this paper, we study the concept of new cost estimation method and the procedure to develop and apply it. We also suggest the method to carry out the cost allocation using Matlab which is more efficient and time-saving than other commercial cost calculation packages.

• Journal of Korean Academy of Nursing Administration
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• v.23 no.2
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• pp.139-150
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• 2017

Purpose: The purpose of this study was to identify nursing service costs associated with all health care costs incurred by the institution. Methods: This study was an empirical case study research in which the nursing cost was separated from total medical cost. The nursing cost index was calculated through a cost allocation method after summarizing costs for personnel, raw materials and administration of each department in one public hospital. The 2014 budget plan, published in 'Public Hospitals Alert', was used as data and the data were analyzed using the Microsoft Office EXCEL 2013 program. Results: When comparing total medical costs and nursing costs, the nursing cost were 27.14% of the total medical cost. The nursing cost per nurse per hour was calculated as \29,128 The nursing cost per inpatient per day was calculated as \157,970, and the administration cost per patient was calculated as \133,710. Conclusion: The results of the research present the process of cost allocation of specific cost elements in the hospital and evidence for administrative costs which in the past have been only vaguely formulated. These are the significant implications of this study.

• Korea Journal of Hospital Management
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• v.6 no.2
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• pp.37-69
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• 2001

A new cost management system, called Activity Based Costing (ABC) system, has arisen to solve the limitation of a Traditional Cost Accounting (TCA) system until last two decades and ABC has been applied by many companies. TCA systems have limitation in tracing cost because they arbitrarily allocate overhead cost to the cost objects without standard for direct cost distribution. ABC is an accounting system that assigns costs to products or services based on the resources they consume. The costs of all activities are traced to the products for which they are performed. Therefore ABC is a cost management system that provides a matrix to accurately quantify consumed resources triggered by activities and activities triggered by products and services. There is little implementation of ABC in the health services field, one of service industries, due to complicated and many activities, and volatile cost object. However, the necessity for applying reasonable cost accounting system is largely issuing as strategy responding hostile environment, and financial pressure, and it is imperative to implement the Activity Based Costing (ABC) system. Therefore, this study presents the framework to develop ABC system for total health service organizations. Cost objects in this study base on medical service activities per health insurance claim from one general hospital located in Metropolitan Statistical Areas (MSAs). Medical service activities include all health insurance claims in the hospital. The purpose of the study is presenting useful tools and basic frame to develop Activity Based Costing system for health service organizations which want to use ABC system. The steps to develop ABC system for health service organizations are following: 1. Identifying of activity centers; 2. Definition of cost objects and activity by activity center; 3. Analysis of activity and tracing activity contribution; 4. Allocation of direct cost for specific activity; 5. Allocation of indirect cost for specific activity; 6. Allocation of depreciation for facilities, applicants, and consumption goods; 7. Allocation of administration cost; 8. Allocation of cost among activity centers; and 9. Tracing cost of cost objects by activity center. This study identified necessary information from existing reports which hospitals generally made by each step, and defined outcome which had to be produced in each step using this information. The steps of this study had limitation to apply all different size hospitals because the steps were structured ABC system by one hospital, however, this study used similar basic framework and methods with general cases. When a health service organization want to apply Activity Based Costing (ABC) system on all activities of it in future days, this study is very useful to design system structure in the health service organization.

• Health Policy and Management
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• v.5 no.2
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• pp.35-69
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• 1995

The managerial environment of hospitals in Korea characterized by low levels of medical insurance fees is worsening by increasing government regulations as to the utilization of medical services, rising costs of labor, material, and medical equipments, growing patient expectations concerning the quality of services, and escalating competitions among large hospitals in the market. Hospitals should seek for their survival strategies in this harsh environment and they should have information about costs of their products in doing so. However, it has not been available due to the complexity of the production process of hospital services. The objectives of this study were to develop a service-based cost accounting model and to apply the developed model to a study hospital to obtain cost information of hospital services. A model commonly used for the job-order product cost accounting in the manufacturing industry was modified for the use in hospitals in Korea. Actual costs, instead of standard costs, incurred to produce a unit of services during a given period of time were estimated in the model. Data required to implement the model included financial information, statistics for the allocation of supportive cost center costs to final cost centers, statistics for the allocation of final cost center costs to services, and the volume of each services charged to patients during a study period. The model was executed using data of a university teaching hospital located in Seoul for the fiscal year 1992. Data for financial information, allocation statistics fo supportive service costs, and the volume of services, most of them in electronic form, were available to the study. Data for allocation statistics of final cost center costs were collected in the study. There were 15 types of evaluation and management service, 2, 923 types of technical service, and 2, 608 types of drug and material service charged to patients in the study hospital during the fiscal year 1992. Labor costs of each of seven types of pesonnel, material costs of 611 types of drugs and materials, and depreciation costs of 212 types of medical equipments, miscellaneous costs, and indirect costs incurred in producing a unit of each services were estimated. Medical insurance fees for basic services such as evaluation and management of inpatients and outpatients, injection, and filling prescriptions, and for operating procedures were found to be set lower than costs. Infrequent services which use expensive medical equipments showed negative revenuse as well. On the other hand, fees for services not covered by the insurance such as CT, MRI and Sonogram, and for laboratory tests were higher than costs. This study has a significance in making it possible for a hospital to obtain cost information for all types of services which produced income based on all types of expenses incurred during a given period of time. This information can assist the management of a hospital in finding an effective cost reduction strategy, an efficient service-mix strategy under a given fee structure, and an optimum strategy for within-hospital resource allocations.

• Korean Journal of Construction Engineering and Management
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• v.16 no.4
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• pp.139-145
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• 2015

Modular construction is combined with manufacturing production process and conventional construction industry technique. Considering characteristic of modular construction production process, manufacturing facilities require indirect costs for utilities, equipment, and overall maintenance, which can affect modular units pricing. However, current modular construction cost classification is inadvertent to reflect the manufacturing overhead costs, because it is generally added as a percentage to sum of labor, material and equipment as it called in single cost pool used. This process is easy to estimate the total construction cost at the project starting points, but it brings on misunderstanding of project profit estimations by "cross subsidization phenomenon". To prevent this situation, in this research aims to provide modular construction overhead cost handling process at the detailed indirect cost calculation for manufacturing stage using Activity-Based Costing as one of the powerful method for overhead costs estimation and allocation. Using this research results, modular construction cost estimators have more detailed cost information of modular units and prevent to misallocate indirect costs. Also, it can be utilized to aid the understanding of the company's profit structure.

• Nuclear Engineering and Technology
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• v.47 no.7
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• pp.849-858
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• 2015

This study set the pyroprocess facility at an engineering scale as a cost object, and presented the cost consumed during the unit processes of the pyroprocess. For the cost calculation, the activity based costing (ABC) method was used instead of the engineering cost estimation method, which calculates the cost based on the conceptual design of the pyroprocess facility. The calculation results demonstrate that the pyroprocess facility's unit process cost is $194/kgHM for pretreatment, $298/kgHM for electrochemical reduction, $226/kgHM for electrorefining, and $299/kgHM for electrowinning. An analysis demonstrated that the share of each unit process cost among the total pyroprocess cost is as follows: 19% for pretreatment, 29% for electrochemical reduction, 22% for electrorefining, and 30% for electrowinning. The total unit cost of the pyroprocess was calculated at $1,017/kgHM. In the end, electrochemical reduction and the electrowinning process took up most of the cost, and the individual costs for these two processes was found to be similar. This is because significant raw material cost is required for the electrochemical reduction process, which uses platinum as an anode electrode. In addition, significant raw material costs are required, such as for $Li_3PO_4$, which is used a lot during the salt purification process.

• The Journal of Korean Institute for Practical Engineering Education
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• v.2 no.1
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• pp.106-114
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• 2010

HRDI(Human Resources Development Institute) has not performed the efficient costing model because of it's variety types of institutes, courses and vocational education and training techniques. This study proposed the integrated costing model using job costing, activity based costing and standard costing methods to meet needs of HRDI. And the model will be used in two-phased approach including adoptable model and ideal model. The integrated model includes costing techniques, cost elements, indirect cost allocation bases and cost analysis methods using a contribution margin model to calculate and analyse cost information in HRDI. The proposed integrated costing model of HRDI has some limitation of no relationship with the performance management. But this model will prepare valuable information by using detailed data and costing techniques. And then this model will be developed as a advanced costing model using standard costing to relate with the performance model.

• Journal of Korea Port Economic Association
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• v.31 no.3
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• pp.167-186
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• 2015

The purpose of this case study is to verify the usefulness of three costing models and a minimum profit management model that can support the logistics warehouse companies in the Busan Newport Distri-park. This case study investigated traditional costing, activity-based costing (ABC), and time-driven ABC (TDABC); and suggested that an appropriate minimum profit management model is contribution margin analysis. Accordingly, in order to verify the usefulness of models, this case study surveyed the actual cost management conditions of companies, applied the three costing models to the "K" warehouse company in the Busan Newport Distri-park, and undertook a comparative study of the results. This case study produced two main findings. First, TDABC was verified as the most useful and advanced of the three costing models tested. Second, contribution margin analysis was confirmed to be the most suitable model to manage minimum profits for port warehouse companies in the Busan Newport Distri-park.

• KSCE Journal of Civil and Environmental Engineering Research
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• v.37 no.3
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• pp.611-619
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• 2017

This paper intends to develop unit water production cost (UWPC) between alternative water resources including desalination, freshwater reservoirs, single-purpose dams, underground dams, and two indirect water in-take technologies - riverbank filtration and aquifer storage and recovery (ASR). The UWPCs of water supply schemes including each alternative are determined based on project cost, and operation and maintenance estimation models, which were developed based on real project cost data. The sensitivity analysis of UWPCs reveals that ASR is the lowest cost option in producing drinkable water among the alternatives, followed by riverbank filtration and underground dam. It is expected that economics related to the finding plays a critical role in supporting water resources planning and budget allocation for central and local water authority in Korea.