Healthcare firms need cost information for planning, budgeting, and control activities. The three phases of the costing process are cost finding, cost allocation, and cost assignment. Accurately costing healthcare encounters requires cost accounting and charge master systems. Relative value units are a measure used to determine the value of services provided by physicians and other healthcare providers.

1. Respond to each of the following questions:
Describe the existing needs for cost information in healthcare
firms.
Describe how cost information relates to the three key activities
of management: planning, budgeting, and control.
Describe the three main phases of the costing process.
Explain the two systems necessary to accurately cost healthcare
encounters of care.
Describe the concept of relative value units (RVU).