June2009 ROYAL LAUREL HOSPITAL Plz Help!

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    abidfatima5
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    Why have we taken balancing figure for operating costs after deducting medical, other staff, and income and expenditure surplus from revenue? Where in the question is it mentioned that we need to find operating costs? Plz help!


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    gromit
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    It doesn’t ask you to calculate operating costs, however, you are asked to carry out a performance assessment on the hospitals’ financial management. There isn’t much financial information to go on: only revenue, medical staff costs, other staff costs and income/expenditure surplus. Obviously there must be other running costs to make the income/expenditure figures work, and these have simply been lumped under operating costs (nothing to do with carrying out operations: just the other costs). Once these costs have been worked out then you might be able to comment , for example, on costs as a percentage of revenue.


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    abidfatima5
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    But my point is if we assume the balance is operating costs then profit would be zero..isn’t that a drastic assumption?


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    gromit
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    Taking RLH, Revenue = 54.2, staff costs = 27.8 and expenditure exceeds income by 1.0. Therefore, there must be other costs of 27.4.


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    abidfatima5
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    Ok thank you! :D

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