| Summary: | To determine the cost of production, there are many hospitals use
traditional cost accounting. On the other hand, the determination of the costs on a
product or service with traditional or conventional methods actually give a
distorted cost information. This distortion occurs because allocated costs resulting
in inaccurate cost determination errors, decision-making, planning, and control.
This ultimately resulted in the hospital setting fees too low or too high compared
to the actual cost appears to generate the service.
Inaccurate cost information makes hospital management wrong in taking
the decision on tariffs and do profitability analysis. In order to minimize the
distortion, traditional cost accounting systems can be replaced with activity based
costing systems.
An accurate cost information of caesar operation is important because it
can affect the decision making and analyze the level of profitability. Based on
that, caesar operation service needs more accurate cost calculation by activity
based costing.
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