Standard Costing Model

With Atebion You Can
About Us
Our Services
Pathology Costing
Contact Information



Atebion is the name of a true modelling tool.  It uses a powerful engine in the background to complete calculations and utilises a familiar Windows interface for ease of use. 

People who have been developing costing software for a long time conceived Atebion and it draws on this experience and the lessons learnt with the old DOS “DataTree” software.  Atebion is flexible, powerful and future proof.  Above all by its use of special techniques, it provides a true decision support tool.

We have fully developed what we believe is a balance between simplicity and the need to have a future proof costing model that can handle any conceivable changes. The same standard costing model may be used to cost most private businesses and the public sector but to keep this document short and simple we shall concentrates only on Pathology and follow the NHS guidelines for costing.

The core-costing model follows our practice for minimising errors and validation. To assist the user, macros are used throughout to add Cost Recovery Centres (Workstations), Products (Test/Processes) and Basic Resources (Staff, Equipment, Overheads and Consumables).

Also note that additional models such as contract monitoring and benchmarking may be combined at any time. 



First of all we need to make sure you understand some basics so in simple terms:

¨      Cost – How much your finance department pay to produce a pathology result.


¨      Price – How much your customers will be charged for the result.


¨      Profit or Loss – The difference between Cost and Price.



The cost of a test / process depends on how you apportion the cost of your resources. Even following the NHS guidelines different hospitals can apportion resources differently so you can’t really compare on cost unless you understand the limitations.

Your reason for costing should dictate the detail you need to go down to and you have to understand the information needed and the time available for the task. This is what we call the Modeller’s Balancing Act with the Identified Trade-Offs.

Below we have listed some apportionment methods to help you understand the variations in apportionment types used to come up with a different cost:

  • Total budget divided by total workload, gives a cost but not very accurate if we treat every test / process the same. We are saying here that everything has the same cost, uses the same resources in equal portions.


  • Split the budget:
    • Resources apportioned by Workload
    • Resources apportioned by WELCAN (Outdated Weighted unit, the longer it takes to complete the higher the value).

Gives different banded cost depending on the WELCAN value of each test/process.


  • Split the budget between workstations:
    • Resources apportioned to each workstation first by square foot, number of staff, etc., (following the NHS costing guidelines), followed by apportioning by Workload and WELCAN at the workstation level. Now we are really starting to cost and able to play limited “What ifs”.


  • Build from the bottom up. Each resource that goes into each individual test is apportioned as accurately as possible to avoid any cross subsidisation e.g. individual grades of staff apportioned by minutes they spend on each test/process/batch, individual consumables allocated to each individual test/process allowing for wastage, equipment directly recovered only from individual test/process used for, etc., This model can cope with advanced resource “What ifs” such as adding, deleting or editing a single contract and will show the resource and corresponding cost implications BUT remember the Modeller’s Balancing Act with the Identified Trade-Offs, you will have to compromise.  

Each method above or combination will come up with a different cost so you need to decide who is going to act on the data provided and what are the consequences of getting it wrong and what is the benefit of getting it right.

Within practical terms the Atebion Costing Model allows almost unlimited apportionment methods for all resources BUT you have to be pragmatic and think about the return on investment. For day one you may decide to apportion cost only to workstations and then these cost are quickly apportioned to each test/process/batch by workload and WELCAN without touching the individual test/process/batch form. The beauty about our standard costing model is that in your own time you increase the detail.



A different questionnaire for each discipline will be given upon receipt of an order number. These questionnaires may be completed before or after training. If before then the training may be on your own individual models. The detail for each resource is up to you.


o       For each workstation, in simple terms for day one you may decide to give:


o       The name of each test / process with achievable workload and WELCAN unit used. It would be ideal if this information comes as a report file straight from your departmental system for easy updating the contract monitoring sub-model each month.


o       Staff, split into their grades then split into whole time equivalents for each Workstation, with some also going to overheads as management and administration.


o       Equipment, Identified individually where necessary and what portion recovered from each Workstation/test.


o       Overheads for day one split only by Workload and complexity unit (WELCAN or other agreed unit), if the data exist these could be apportioned to workstations or we could use the NSH costing manual guide-lines to the letter.



The core-costing model has two main different types of Folders (sheets) that we have named Lists and Forms. 

There are three different List Sheets with a p, r or c pre-fix as follows:

1.      p-list – lists of product records for easy editing workloads and constructing multiple contracts using a single p-list sheet for each contract.

2.      r-list – lists of resource record sheets for Staff, Overheads and Equipment for easy editing the cost to be recovered, the cost categories, resource groups and a quick option to include or exclude each value in the next calculation.

3.      c-list – lists of consumable records for easy editing of consumable properties. A different c-list may be used for groups of consumables or for different suppliers.

and two different Form Sheets with a r or p pre-fix as follows:

1.      r-form - resource description form, used for individual resource records or group resource records from the r-list that need to be apportioned by a different apportionment method to workstations and/or products/processes. Resource forms may also feed other resource forms or apportion cost or part of, direct to Sites and Cost Recovery Centres (workstations).

2.      p-form – product description form, used for building test/process profiles and sub-product profiles by combining sub-products, resource forms and individual records from the consumable c-list.

Figure 1 below shows the Folder Segment with the structure of folders in a core-costing model.  Like a file management system, these branches can be opened to display their corresponding child folders.


Figure 1. The core-costing model’s structure of top folders.

Under the LIST branch of folders we have five different List sub-folders with their corresponding prefixes as follows:

¨      (W) Workloads, with their special product workload sub-folders (p-list), in this case a single folder (sheet) for each list of Test/Processes for each contract, for each time period.  You need to double click on the folder to open this branch to view individual contracts (sub-folders), like files in file manager (see also contracts model).

¨      (S) Staff List, single standard resource folder (r-list) as in figure 2a with a numbered row for each individual staff member.

¨      (O) Overhead List, single standard resource folder in this case (r-list) as in figure 2b with a numbered row for each overhead item.

¨      (E) Equipment List, single standard resource folder for each workstation for easy editing (r-list) with a numbered row for each individual piece of equipment. A full asset register model may be added.

¨      (C) Consumable List, single special consumable folders (c-list) with a numbered row for each individual consumable. A different c-list may be used for each consumable group or supplier for each time period.


The same standard designed resource list sheet with it’s : rlist suffix is used for Staff, Equipment and Overheads. The (S), (E) and (O) prefix is used here for navigational purposes only. At any time, each could be sub-divided further in order to easily update budgets e.g. overheads for different sites in different sheets for different time periods.

To aid navigation some folders are empty and used solely for navigation purposes, grouping sheets in a familiar tree structure.



Figure 2a below shows a resource list sheet used for staff. Figure 2b below shows a resource list sheet used for overheads. Each list is assigned a start and end date and each resource is assigned the following:

¨      Resource ID – Individual staff name in this example.

¨      Cost Class - choice of Fixed, Semi-Fixed and Variable, follows NHS Costing guidelines.

¨      Cost Category – choice of Direct, Indirect and Overhead, follows NHS Costing guidelines.

¨      Resource Cost – total amount you wish to recover. Later this cost could easily be a calculated value from a sub-sheet. In this case it may include salary, on-cost, training cost, etc.,

¨      In Use – Yes/No Option to include/exclude this cost in the next calculation.

¨      Group Resource ID - which resource description form (rform) to add this cost to as an independent cost.


Figure 2a. Staff Resource List.


Figure 2b. Overhead Resource List.



A different resource description form is set up for each different apportionment type. Figure 3a below shows the resource description form for the Direct Staff that have been assigned from the Staff List to a specific Staff Grade.  In this case staff are further apportioned to other resource description forms by percentage to each Workstation (Cost Recovery Centre), note that we could use whole time equivalents instead of percentage or any other appropriate measure. 

The resource description form shows the following:

¨      Resource ID – the name of this identified Item or group, in the pathology model we would have a resource form for each MLA and MLSO grade.

¨      Independent Cost – in this case calculated by summing all staff directly assigned from the staff list in figure 2a to this Resource ID.

¨      Redirected Cost – calculated from resources assigned from other resource description forms, in this case zero.

¨      Measure – Name of Itemized Units used to apportion this total cost by.

¨      Apportion Type – (see also Apportionment Section) pull down window with choice between:

o     Workload / Itemized

o     Workload / Global

o     Default Complexity / Itemized

o     Default Complexity / Global

o     Resource Complexity / Itemized

o     £ Tax / Itemized

o     £ Tax / Global

¨      Apportion to Site/CRC – Other than using all Sites/CRC’s or a single Site/CRC, you use the corresponding macro to add extra rows to include selected Site/CRC’s with apportionment quantity split.

¨      Apportion to Resource – Add extra rows to include more splits, option to apportion to other resource forms as Redirected Cost. In figure 3a we used the corresponding macro to add rows and chose additional workstation staff resource forms.

¨      Units used – in figure 3a we split MLSO 1 staff over 4 staff groups. In figure 3b 100% is apportioned by Resource Complexity / Itemized, only for CRC 1 (e.g. main lab workstation).  Figure 3c shows Overheads by Square Foot. Overheads that have been redirected to apportion to CRC’s by Square Foot.

¨     Site ID and CRC ID – identify specific location (selected or all)

¨      Diagnostics and Short Fall - informs of possible errors.


Figure 3a. Resource Form for MLSO 1 Staff, splitting them between other resource forms for Main Laboratory, Coagulation, Isotope and Transfusion workstations.

 Figure 3b below shows the next stage in the staff costing methodology that apportions the redirected cost from figure 3a above, for the Main Laboratory Staff to be further apportioned just to the Main Laboratory by Default Complexity/Global and as such, nothing else needs to be done in order to apportion the cost to every test in the Main Laboratory by the WELCAN value or any other weighted value you choose for each individual test/process.


Figure 3b. Resource Form for further apportioning Main Laboratory Staff by Default Complexity/Global.

If instead of using Default Complexity/Global, we used Resource Complexity/Itemized, then this resource form will need to be referenced in each appropriate product form in order to count towards that product cost (see figure 5).


Figure 3c below shows another resource description form for redirected Overheads that have been assigned from the overhead list to be apportioned in this case by Square Meter, 500 units to the Main Laboratory and 350 units to the Coagulation workstation. The Main Laboratory will have to recover more cost. These cost are then apportioned further by Workload/Global but only to the two workstations itemized in this form. No further action is needed to apportion to each test in these two workstations.


Figure 3c. Resource Form set to apportion Overheads to the two itemized Workstations by Square Meters.  The cost covers Heating, Cleaning, etc., 


The consumable list sheet, partly shown in figure 4 below has a unique name, start date and end date. It also has the following columns:

¨       Description – name of consumable, prefixed with (C) automatically.

¨       Cost Class – choice between Fixed, Semi-Fixed and Variable.

¨       Cost Category – choice between Direct, Indirect and Overhead.

¨       Input Cost – purchase cost.

¨       Input Measure – how purchased, by box, bottle etc.,

¨       Input Quantity – e.g. how many in a box 1,000, 500, 1, etc.,

¨       Conversion Factor – converts input quantity and cost to output quantity and unit cost, allowing for global wastage if any.

¨       Output Measure – each, ml, etc.

¨       Output Unit Cost – calculated cost of each output measure.

¨       Total Quantity Used – calculated number of output measures used for the total workload.

¨       Total Input Measure Used – calculated number of input measures used, boxes, bottles, etc., for the total workload.

¨       Total Cost – calculated individual consumable budget for the total workload of all products.

¨       Diagnostics – calculated to show one of the following:

o       OK - no problems found.

o       Ref. not Unique - another record with the same ID (name) found in this model.

o       Ref. not Found – not used in this model.

¨       Class/Category Diagnostics – calculated to show one of the following:

o       OK – states both assigned.

o       Ref. not Found – error - states not assigned


Figure 4. Consumable List with input/output properties and calculated values for the workload set in the model.

For the first day we could have what we call a basket for the total cost for all consumables for each workstation in the Overheads resource list, feeding a resource form for each workstation to be further apportioned by Default Complexity Global (e.g. WELCAN). Day two we reduce baskets costs by the consumables we take out and put directly to the consumable list then to individual Test/Processes, allowing for wastage at the stock level and wastage to each individual test/process.


Using the total workload figures from all of the contract sheets that are switched on, the program calculates the total consumable usage and cost. If the workload figure equals last months figures then the stock values should equal what has been used, if not, you need to add extra values for use and/or wastage.



The product form (pform) as shown in figure 5 below allows you to build a profile of all the resources that go into each single product or sub-product (Test/Processes/Batches/etc.,).  Product forms may feed other product forms as sub-test/sub-processes.

The rows for the Description column include the following:

¨       Product ID – name of the product or sub-product.

¨       Default Complexity – name given to Apportion Type used for “Default Complexity / Itemized” and “Default Complexity / Global” e.g. Körner, WELCAN, Minutes, etc.,

¨       Independent Workload – the sum of this independent product produced without the redirected workload. Calculated from the sum of this product found in all product list sheets with the In Use field set to Yes.

¨       Redirected Workload – the calculated workload where this finished product is used in another product as a sub-product and that product has a workload set.

¨       Total Workload – calculated, the sum of Independent and Redirected workloads.

¨       Made-up Product – products can feed into other products in their own right or as sub-products (also see CRC ID column). Macro used to insert additional rows.

¨       Staff Complexity – names of staff resource forms contributing to this finished product. Macro used to insert additional rows. The staff resource forms would need to be set to Resource Complexity/Itemized in order to appear directly in a product form. From here you could use a different unit (minutes) for different grades of staff.

¨       Equipment Complexity – names of equipment resource forms contributing to this finished product. Macro used to insert additional rows. Same as staff above.

¨       Other Complexity - names of other resource forms contributing to this finished product. Macro used to insert additional rows.

¨       Basic Consumables – individual resources chosen from the consumable lists. Macro used to insert more than one. Additional wastage factor could also be added to the quantity used at the product level.

¨       Global Exclusions – allows exclusions of resources, those assigned global apportionment (see apportionments section). Macro used to insert additional rows.

¨       Product Cost Summary – breaks the total product cost down to each basic resource cost classification category.


Additional cells in other columns include the following:

¨       Site ID – Used for grouping and navigation purposes.

¨       CRC ID – Used for grouping and navigation purposes.

¨       With Tax – Redirected Workload, the number actively used in other products with Tax.

¨       Pre Tax – Redirected Workload, the number actively used in other products without Tax.

¨       Units Used – number of basic units used including wastage if necessary.

¨       Complexity – value to produce a single product e.g. minutes of staff time taken to produce.

¨       Measure – for display only, explains what the units are e.g. minutes, each, ml, etc.,

¨       Apportionment Type – see APPORTIONMENT section.


Figure 5. Product Form showing the profile of resources used to build a single product.


The single master Product List sheet may be used to update the workload figures for each product form or you could add additional Product List sheets to act as individual contracts and the total workload for each product form will automatically sum all the contracts that are set to “In Use”.

The master Product List sheet (p-list) is automatically filled in as a product is inserted using the Macro facilities. If a product list is used for individual contracts then the master product list “In Use” field should be set to NO or you would double the workload. In figure 6 below we see Product List sheet showing the following cells:

¨       Product List ID (Contract ID) – the name given to this list.

¨       Product ID – the name of each product chosen from it’s pull-down corresponding enumerated set.

¨       Site ID – the site where the product is assigned.

¨       CRC ID – the CRC where the product is assigned.

¨       Workload – the known workload figure for this list.

¨       In Use – Yes/No option to include/exclude each product in the calculations.

¨       Diagnostics – indicate duplicates within this list or products don’t exist.

¨       Total Cost – the unit cost multiplied by this list workload.

¨       Unit Cost – the unit cost of each product calculated in the product form.

¨       Products Cost Summary – the total cost of this list broken down into the cost categories.


Figure 6. Product List Sheet (p-list) used to update the workload figures and to show report information. May be used for individual contracts. Please ignore these cost; they bear no resemblance to the actual cost of named test.



The product cost summary shown at the bottom of each Product List (contract sheet) and Product Form (figure 7 below) show the Total Product Cost with Tax.


Figure 7. Product Cost Summary  



In the costing model, a protection lock has been set for all cells that the user should not edit.

There are two versions of the software, the user version and the developer version. The user version is restricted in the available commands to minimise errors for the day-to-day user. Trained Developers can use the developer’s version.


The next three figures below show the three main error statistical sheets built into the core-costing model in order to quickly highlight possible errors; these are in addition to the software diagnostics that also enable values and relationships to be traced in any direction.


Figure 8 below shows a summary of the model diagnostics. It indicates OK or Some Errors together with the number of errors found.  Using the software diagnostic tools, the user can then quickly investigate and edit if not intentional or report it to the model developer.


Figure 8. Model Diagnostics Summary sheet to highlight possible errors.

Figure 9 below shows a single summary list of all the Product sheets. This is a quick check to spot any errors in any Product sheet (Test/Process). The columns that are available are as follows:

¨       Product ID

¨       Site ID

¨       CRC ID

¨       Unit Cost

¨       Independent Workload

¨       Redirected Workload

¨       Total Workload

¨       Independent Cost

¨       Redirected Cost

¨       Total Cost

¨       In Use – Yes or No, Included/Excluded in calculations

¨       Diagnostics – OK or Some Errors to investigate.


Figure 9. Product Statistics and error warning sheet.

Figure 10 below shows a single summary list of all the Resource sheets. The columns that are available are as follows:

¨       Resource ID

¨       Independent Cost

¨       Redirected Cost

¨       Total Cost

¨       In Use – Yes or No, Included/Excluded in calculations

¨       Diagnostics – OK or Some Errors to investigate.


Figure 10. Resource Statistics and error warning sheet.

Another warning you may come across is the word NONE in a field. In dictionaries (enumerated sets) there is a number behind every name – if a cell is assigned to a specific set (pull down list) and the cell is set to unknown then on calculation, if a number does not fit then it assigns the item named none – meaning the cell has not been assigned to an acceptable item.

The extensive built-in Atebion validation tools will give you additional confidence by minimising and finding errors. There is no need to buy additional add-in programs from other suppliers to get over our design mistakes.



The different fields and descriptions associated with apportionments in the core model are as follows:

¨      Measure – User defined name of itemized units used to apportion cost by e.g. Square Meter, Number of Staff, No of Days, %, etc. The Unit used will be calculated by summing all the sites/CRC’s itemized in the form and the corresponding cost will be apportioned to each site/CRC in order to be apportioned further by the Apportion Type.


¨      Apportion Type – pull down window with choice between:

o     Workload / Itemized – apportion by workload but only where this resource is itemized to a workstation in a resource form and itemized in specific test/processes/batch (product form).

o     Workload / Global – apportion by workload to every product but only where this resource is itemized to a workstation in a resource form.

o     Default Complexity / Itemized – using the default product complexity (WELCAN) value in the product form to apportion cost but only where this resource is itemized to a chosen workstation in the resource form and itemized in specific test/processes/batch (product form).

o     Default Complexity / Global - using the default product complexity value to apportion cost to every product with a workload value but only where this resource is itemized to a workstation in a resource form.

o     Resource Complexity / Itemized - apportion by user defined weighted value and only where this resource is itemized in specific product forms.

o     £ Tax / Itemized – after the total cost of a product or contract is calculated then the amount of money assigned by £ Tax / Itemized will be apportioned only where this resource is itemized in a product by a taxation method. The higher the cost the bigger the share of this tax it pays (uses simultaneous equations).

o     £ Tax / Global - after the total cost of all products or contracts are calculated then the amount of money assigned by £ Tax / Global will be apportioned to all itemized workstation products by a taxation method. The higher the cost the bigger the share of this tax it pays (uses simultaneous equations).


¨      Apportion to Site/CRC (workstation) – include in one or more selected Sites/CRC’s, to apportion over. Apportion to other Site/CRC’S using user defined values.


Apportion to Resource – include more splits, apportion to other resource forms as Redirected Cost using user defined values. e.g. staff grade forms feeds staff workstation forms.



The main commands are controlled by macros that have the following main advantages:

¨       Minimises training requirements.

¨       Minimises errors.

¨       Gives users more confidence.

¨       Makes it easier to build and update a model.

¨       Saves considerable time building and updating a model. 

Figure 11 below shows the core macros that comes with the standard costing model:


Figure 11 a to g showing the Macros available in the standard costing model.


Figure 12. Diagram showing the main building blocks and the references from the Product Form.



All Atebion models come with an optional full range of bureau services to assist the busy managers.

Our additional bureau service allows you to tap into a wide knowledge of modelling experience with emphasis on keeping it simple for the user and minimising errors yet modelling the way you work and providing solutions to complex problems. We can also take on the mundane regular task of maintaining your models and providing reports for you on time.

You could email us the agreed information each period and we return the agreed calculated reports and an updated copy of the master model. We could also do advanced “What if” reports.

We can’t be beaten on value for money because of the Atebion software and our modelling experience.

Do you have any other specialist requirement that could be written by a programmer but the specification is difficult to define as the task will evolve and hence would require too many returns to a programmer to be practical.

Please email to arrange a mutual time to discuss your requirements.



In figure 13 below you can see on the right hand side the tree structure of folders showing one proposed structure for the Histology model. The product form shows the Direct IF (Renal) Immunology profile. Product forms can feed other product forms as Figure 14 shows, a Haematoxylin and Eosin product form.


Figure 13 Proposed Histology structure for Folders and the Direct IF (Renal) Immunology profile.


Figure 14 Detailed Haematoxylin and Eosin product form



The completed Atebion standard costing model has only 138 equations in total, one for each rule and will not increase as you add additional tests/processes or resources. Now compare that to how many formulas would be in a standard spreadsheet model and the problems with validating such a model if it was capable in the first place.

Return to Models