Job Order Costing System Essay

Job Order Costing System It can be determined that a hospital or clinic uses the Job Order Costing System. The job order costing system composes a job cost record for each job, item or special order. The job cost record reports the direct goods and direct labor, which actually are used, including the manufacturing overhead that is assigned to each job. The cost accounting system which generates a timely and accurate cost information system consists of the involvement of paperwork for patients’ records, billings, and insurance reimbursement programs. Cost flows are an important part of this system and can be defined as the costs of raw material; work that is in progress, a finished goods inventory and the cost of goods sold.

In assigning direct labor cost to an individual job the use of a time card to keep a record of an employee’s time may be used.

Webb 2 In addition, Production Activities in job order costing is a method used when customers incur unique amounts of cost. Job costing is allocated by the service and allows a detailed price based on the service provided. An example of this is when several patients enter a health facility encountering different services at different costs. Different costs for different services will often be evident. Blood work, x-rays, scans may produce a higher cost. While receiving a shot may result in a lesser cost. This factor lowers the cost of a service for an individual while extensive tests may increase a greater cost. Also, Overhead Allocation Bases is another central component in this system. The allotment used is a consideration that may be used in production which includes direct labor.

Direct labor is the staffing of the hospital. This includes maintenance, billing, office

Job Order Costing of Services is customized to fit a particular service of a hospital and a clinic. In order for a consumer to receive job order costing of services, the occurrence of a Webb 3 consumer needs must be met by achieving a specific service. Often times all the care needed can be provided in one place. These types of services that may occur are diagnosed observation, consultation, treatment, intervention, and rehabilitation. Job order costing of services is customized according to an individual patient’s needs. In reality, the Job Order Costing System accumulates cost and then assigns them to services. This system is necessary for a hospital or clinic to function properly. Keeping costs in control has become critical for healthcare delivery in many different ways. It is beneficial for a hospital to be effective with the financial data that is presented. When healthcare institutions coordinate the cost of patient services with the quality of care, then the outcome will in effect become a balance between the commitment to the patient and be at a more reasonable cost. In the end, the patient will be the one that will be