Accounting device whereby all related costs attributable to some “center” within an institution, such as an activity, department, or Program (e.g., a hospital burn center), are segregated for accounting or reimbursement purposes. Contrasts with segregating costs of different types, such as nursing, drugs or laundry, regardless of which ”center” incurred them.<\/p>\n
An area of activity of the hospital with which direct costs can be identified. Accounting practice is to assign direct costs to such cost centers, and to allocate to each cost center its proportionate share of indirect costs, in order to give management a tool for cost control (or pricing). When a cost center is also revenue-producing, that is, an area for which charges are made (for example, an operating room), the allocation of direct and indirect costs, along with data about the services rendered, permits the charge for each service to be sufficient to cover the cost of that service.<\/p>\n
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Accounting device whereby all related costs attributable to some “center” within an institution, such as an activity, department, or Program (e.g., a hospital burn center), are segregated for accounting or reimbursement purposes. Contrasts with segregating costs of different types, such as nursing, drugs or laundry, regardless of which ”center” incurred them. An area of activity […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-80896","post","type-post","status-publish","format-standard","hentry","category-c"],"yoast_head":"\n