I’m studying for my Management class and need an explanation.
Please respond to the two peer to the foloowing question
Your team has been assigned to design and launch of a new product or service. This could be an external product for sale or an internal service to support other departments. As you prepare for your first team meeting, you know that identifying and classifying costs will be an essential part of the project.
- Briefly explain what the new offering is (Note: this can be hypothetical or based on your current role at your company; you should not share any proprietary information)
- Identify and describe one fixed cost and one variable cost in your department, and explain whether they are controllable or non-controllable.
- Identify whether these costs are traceable to direct materials, direct labor, or overhead.
– OR –
Consider your current organization, describe how costing is used or could be used to better understand the financial breakdown of products and/or services delivered. Would this information support you in your current role and/or aspired-to role? Have you seen instances where costing is not used effectively or could be better leveraged?
RE: Week 6 Discussion
Good Afternoon Everyone,
I currently work in the healthcare industry. For this week’s discussion post I chose:
Consider your current organization, describe how costing is used or could be used to better understand the financial breakdown of products and/or services delivered. Would this information support you in your current role and/or aspired-to role?
I currently work in the Rehabilitation Center of the hospital. The costs of services are fixed. Fixed costs are unchanged; it doesn’t matter if there is an increase or a decrease in the services provided (1). The price paid by the patient varies depending on the insurance they have if the insurance company feels the service is necessary if they have a copay if they have a deductible and even if the patient has insurance. Our facility is one of the only rehabilitation facility’s that accepts Medicaid. Novant Health offers services to help patients in financial need (2). Our self-pay patients receive a 30-40% discount for services rendered. We have Financial Navigators available to help the patient plan for procedures that are predictable (2). Patients can set up payment plans to pay their bill or they can apply for Charity care (2). Patients who qualify for Charity care will receive services at 100% discount (2). Novant Health does not turn anyone away who is in need of care.
Have you seen instances where costing is not used effectively or could be better leveraged?
There were instances when I worked for a private practice that I saw variable pricing. My doctors would give discounts and sometimes free services to their friends. This practice was never used for patients who were in need and that part was always disturbing for me.
- Siciliano, Gene. (2015). “Cost Accounting: A Really Short Course in Manufacturing Productivity. McGraw-Hill Education
- Novant Health. (2020). “Financial Assistance for the uninsured.” https://www.novanthealth.org/home/patients–visitors/your-healthcare-costs/financial-assistance-for-the-uninsured.aspx
RE: Week 6 Discussion
Hello Class and Prof. Linda,
For this week I have prepared to share with you a project that my team and I were working on with IT to bring the tool into production.
It is a software tool which was developed internally, that my team is using it for quite some time.
Because we had a great success with it, I decided the make it available to other teams within our company.
So what this tool does? It is predicting analytics of warranty spent and parts availability at our warehouse. Raises a flag when a part becomes low in inventory , and it sends signals to purchasing and logistics. On the other hand, for warranty spent, it predicts the future cost, and an alert will go to Quality Engineers for future investigation and improvements.
As you can see the tool will satisfy a larger number of users, if it will go into production, and if it will be used in real time.
Not to mention, the time and effort will be drastically improved, it will lower the cost on warranty, it will eliminates the low inventory, that means improving the variable cost.
This tool will generate reports that can be used by Finance, Engineering, Brand Quality, Logistics, Supply Chain, and many more.
By implementing this tool , it will help in long term with labor cost for data scientists, data analyst, machine learning, software, equipment, in one word, with the fixed cost.
The fixed cost is controllable, however, today the variable cost is not controllable, however, open the tool to a larger users, that don’t require to have high skills in analytics, the variable cost could be controllable as well.
1. EOP Videos, Week 6
2. Finance for Nonfinancial Managers – Chapter 8
3. Vital Truths About Managing your Costs, HBP
4. Cost Allocation, https://xplaind.com/670705/cost-allocation