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1) Labor costs of an auto mechanic are seldom based on actual hours worked. (Many of us realize this when we have serviced our automobiles). Instead, the amount paid a mechanic is based on an industry average of time estimated to complete a repair job. The repair shop bills the customer for the industry average amount of time at the repair center’s billable cost per hour. This means a customer can pay, for example, $120 for two hours if work on the car when the actual time was only one hour. Many experienced mechanics can complete repair job faster than the industry average. The average data are compiled by engineering studies and surveys conducted in the auto repair business.

Assume that you, as the auto shop’s accountant, are asked to complete such a survey for a repair center. The survey calls for objective input, and many questions require detailed cost data and analysis. The mechanics and owners know you have the survey and encourage you to complete it in a way that increases the average billable hours for repair work.

For this discussion, describe the direct labor analysis you would undertake to complete this survey and why you would take that particular approach to gathering data.

 

2) According to an article published in the News-Tribune, a 39-year-old woman, who was being treated for breast cancer, died as a result of receiving the wrong dosage of cyclophosphamide (a cancer-fighting agent) and an overdose of another drug meant to keep her from suffering side effects. This happened at a reputable facility that specializes in the treatment of cancer.

At least a dozen doctors, nurses, and pharmacists missed the medication error for four days. Her husband reported that she suffered tremendously as the lining of her intestine was shed, resulting in her literally vomiting sheets of tissue. The doctors had reassured the patient and her husband that all was normal. Her heart failed after receiving four times the recommended amount of medication.
An autopsy revealed no visible signs of cancer in her body, which indicated that the treatment had worked. Another woman died of a similar mistake two days earlier. Human error was believed to be the only possible explanation, according to the treatment center. Incorrect doses of medication through either dispensing error, administration error, or prescription error can be deadly. Moreover, many adverse events go unreported.

  1. What type of event is this? Provide reasons to support your answer.
  2. Hospitals perform several types of patient care reviews, usually through a committee. What type of review(s) would be done on this case?
  3. What is the process used to identify the cause of this death and who needs to be involved in the investigation, and what tools should be used to analyze the situation?
  4. Discuss what kinds of changes are likely to result in an improved system for treating patients using toxic medications.
    • 7 years ago
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