vol 19 no 3,2019

A Proposed Model for Analyzing the Cost Deviations, Using RCA (Resource Consumption Accounting) Approach with Application on a Saudi Hospital

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A Proposed Model for Analyzing the Cost Deviations,Using RCA (Resource Consumption Accounting)
Approach with Application on a Saudi Hospital

• Fahad Sulaiman Mohammed Al-Nafaa
• College of Business and Economics
• Qassim University
• This email address is being protected from spambots. You need JavaScript enabled to view it.
• Mustafa Mohammed Jumaa Ismail Abu Amarah
• College of Business Administration at Alrass
• Qassim university
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• Received 70/07/2018                              Accepted 07/70/2019
• https://doi.org/10.12816/0054694
• Abstract:
  The aim of this study is to present a proposed model for analyzing the deviations of indirect costs
  according to the RCA approach, and to indicate the lack of traditional approaches in this field.
  A case study is conducted on a Saudi hospital to show the deviations of indirect costs and their effect on
  three types of decisions: decisions on the extent of exploitation of available resources, decisions to provide
  information to decision makers, and performance evaluation decisions. It should be noted that the case study
  required the need to survey the opinions of the hospital administrators and cost accountants, as well as a group
  of faculty members and their assistants. The analysis of deviations according to the traditional approach does
  not provide correct or significant monitoring information, and the reports prepared in light of this approach
  provide inaccurate and ineffective signals to provide information to decision makers and to evaluate
  performance, or allocation of available resources. Accordingly, a model is proposed in which the deviations of
  distributing the indirect costs in accordance with the RCA (resource consumption accounting) approach are
  divided into six deviations: two of which affect the value of the distributed costs and four deviations that do not
  affect the value of distributed costs. The research resulted in a number of recommendations, including the
  following: to emphasize the need for academic expansion in teaching the RCA approach, especially in practical
  terms, and to emphasize the need to extend the application of RCA both in terms of distributing and in terms of
  measuring deviations, in the industrial or service sector, the public or private sector.
  Keywords: Criticisms of Traditional Deviation Analysis, Resource Consumption Accounting Introduction, A Suggested Model of
  Deviation Analysis
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