Healthcare finance Assignment Example | Topics and Well Written Essays - 250 words

Healthcare finance - Assignment Example Variability in contribution further implies variability in marginal cost equation because contribution is an element of the equation. In addition, contribution has direct impact on profit and change in the environment, with volume remaining constant, means lower profit to volume ration because of lower contribution. Further, reduced marginal cost, due to discount the discounted fee for service environment shifts the break-even point. Consequently, contribution influences change in the other three elements of the analysis (Gapenski, 2008). Ability to identify factors to cost is one of the important attributes of cost drivers. This allows for cost determination and ability to control costs. Another important attribute of an effective cost driver, which transcends to effectiveness of cost allocation, is the ability to identify the level at which cost occur, a feature that facilitate understanding of costs and their control (Gapenski, 2008; Kinney and Raiborn,