1. What are the market and competitive forces faced by Boston Children's Hospital? Identify some of BCH's strengths, weaknesses, opportunities, and threats.

2. What was the costing method previously used by BCH? Why are clinical department heads Drs. Meara and Waters interested in developing more accurate cost estimates for their procedures? What strategic mistakes might the their department make due to incorrect estimates of costs?

3. Use the accompanying Excel spreadsheet to calculate the costs and profit margins of the three different office visits using i) the RCC method and ii) TDABC (Time-Driven Activity Based Costing) method. Report the costs and profits in a small table. What explains the difference in costs and profits using the two methods.

4. What decisions would the department heads make differently based on the more accurate cost estimates?

 

Case : Boston Children's Hospital - Measuring Patient Costs.