Grouping Expenses by Cost Center

Cost centers are one method of grouping expenses. For example, a nursing home may consider the Admitting department as a cost center. In that case the expenses grouped under the Admitting department cost center may include:

  • • Administrative and Clerical Salaries
  • • Admitting Supplies
  • • Dues
  • • Periodicals and Books
  • • Employee Education
  • • Purchased Maintenance

The Metropolis Health System groups expenses for the Intensive Care Unit into its own cost center. Laboratory expenses and Laundry expenses are likewise grouped into their own cost centers.

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  • 1. Set up a worksheet with individual columns across the top for the three cost centers: Intensive Care Unit, Laboratory, and Laundry.
  • 2. Indicate the appropriate cost center for each of the following expenses:
    • • Drugs Requisitioned
    • • Pathology Supplies
    • • Detergents and Bleach
    • • Nursing Salaries
    • • Clerical Salaries
    • • Uniforms (for Laundry Aides)
    • • Repairs (parts for microscopes)

    (Hint: One of the expenses will apply to more than one cost center.)

Headings for your worksheet:

Intensive Care Unit      Laboratory      Laundry