The indirect and overhead costs are included together in
the “cost pools” and allocated to the specific cost centers
(e.g. pharmacies, theatres, wards) and then apportioned to
the specific medical services. Each type of cost pool is
identified as fixed, semi-fixed or variable. The main fixed
and semi-fixed costing pools are the costs of wards, theaters
and diagnostics. The absorption rate is calculated by dividing
the combined fixed and semi-fixed costing pools for wards,
theatres and outpatients by the appropriate activity units,
which include: