ECONOMICS

Detailed explanation-1: -In traditional cost accounting systems, the volume-based costing (VBC) is the most popular cost accounting method. In this method, the indirect costs are allocated to each cost object (services or units of a hospital) using a single indicator named a cost driver (e.g., Labor hours, revenues or the number of patients).

Detailed explanation-2: -Cost ascertainment is the process of determining costs on the basis of actual data. Hence, the computation of historical cost is cost ascertainment while the computation of future costs is cost estimation. Both cost estimation and cost ascertainment are interrelated and are of immense use to the management.

Detailed explanation-3: -Cost Unit is defined as: (a) Unit of quantity of product, service or time in relation to which costs may be ascertained or. expressed.

Detailed explanation-4: -Composite Cost Unit: Sometime two measurement units are combined together to know the cost of service or operation. These are called composite cost units. Examples of Composite units are Ton-km., Quintal-km, Passenger-km., Patient-day etc.