When Estimating the Cost of the Laundry Department in a Hospital,which

question 123

Multiple Choice

When estimating the cost of the laundry department in a hospital,which of the following cost drivers should be used?

• A) number of patients
• B) number of patients times the length of stay per patient
• C) number of patients in intensive care and critical care
• D) number of pounds of laundry

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Definitions:

Discount Amortization

The process of systematically reducing the discount on bonds payable over the life of the bonds, thereby increasing the carrying amount of the bonds.

Semiannual Interest

Interest that is calculated and paid twice a year, often used in the context of bonds and loans.

Straight-Line Method

A depreciation method that allocates an equal amount of depreciation expense for an asset over its useful life.

Semiannual Interest Expense

The amount of interest cost incurred every six months on borrowed funds.