ABSTRACT
The Purposes and methods of cost analysis which may be applied to hospitals are similar to those which are encountered in business enterprise. The measurement of the costs of products serves two purposes: To control the future expenditures for similar products (commodities or services), and to compare the costs of the products with the income they produce. Whether or not the income can or should exceed the cost is a matter of policy. The methods of hospital cost accounting are not peculiar to these institutions, although there is a feeling at present among hospital administrators which is not unlike that expressed by managers of industrial enterprises 30 years ago, namely, that a cost accounting system is a luxury and a nuisance, rather than a tool of control.
