ASSESSMENT OF THE COST OF SELECTED CHEMISTRY LABORATORY TESTS USING ACTIVITY-BASED COSTING: A CASE STUDY FROM AN-NAJAH NATIONAL UNIVERSITY HOSPITAL TITLE OF THESIS AS APPROVED BY FACULTY OF GRADUATE STUDIES

Abo ALola, Husam Taiseer Hassan

ASSESSMENT OF THE COST OF SELECTED CHEMISTRY LABORATORY TESTS USING ACTIVITY-BASED COSTING: A CASE STUDY FROM AN-NAJAH NATIONAL UNIVERSITY HOSPITAL TITLE OF THESIS AS APPROVED BY FACULTY OF GRADUATE STUDIES

Date

2025-06-29

Authors

Abo ALola, Husam Taiseer Hassan

Publisher

An-Najah National University

Abstract

This study aims to assess the application of the Activity-Based Costing (ABC) system in the chemistry laboratory at An-Najah National University Hospital, with the purpose of evaluating its effectiveness in improving cost calculation accuracy and resource management. The study adopted a descriptive cross-sectional methodology, using the “Cooper” model, which consists of two main stages: cost analysis and activity identification, where indirect costs are determined and linked to the activities that drive them. Data were collected from the hospital’s financial records as well as interviews with financial managers and laboratory staff. The results showed that the ABC system provides greater accuracy and transparency in allocating costs by identifying the activities that consume resources and directly linking them to costs. This approach improved resource utilization and offered valuable insights into laboratory operations. The study further demonstrated that the ABC system contributed to enhancing financial and administrative decision-making by providing managers with a precise understanding of the costs of different laboratory activities. This enabled the identification of unnecessary activities or those consuming resources without adding value, leading to improved processes and reduced waste. However, the study also indicated that implementing the ABC system requires additional time and effort at the initial stage, particularly with respect to training financial and administrative staff to use the new system. It also necessitates the provision of appropriate information systems to facilitate the tracking of activities and their associated costs. The study recommends the wider adoption of the ABC system in other hospital departments, especially those that require high accuracy in cost allocation, such as surgical operations and intensive care. It also emphasizes the importance of updating the hospital’s accounting systems to keep pace with modern developments in financial management, as well as developing human resources and providing the necessary information systems to ensure successful implementation. In conclusion, the study indicates that the ABC system is a powerful tool for improving financial transparency and reducing unnecessary costs in the complex environment of hospitals. Although it requires additional resources initially, it provides significant long-term benefits in terms of enhancing resource management and enabling more accurate financial decision-making.