THE ELOISE HOSPITAL AND INFIRMARY IN WAYNE COUNTY IS COMPOSED OF A HOSPITAL FOR THE PSYCHOPATHIC, A HOME FOR THE INDIGENT, AND A GENERAL HOSPITAL. OVER A PERIOD OF 4 YEARS ITS COST ACCOUNTING SYSTEM PRODUCED INVALUABLE INFORMATION FOR MANAGEMENT AND ENABLED THE INSTITUTION TO OBTAIN MORE EQUITABLE REIMBURSEMENTS FROM THE STATE THAT EXCEEDED THE COSTS OF INSTALLING AND OPERATING THE SYSTEM. AN EFFECTIVE INSTITUTIONAL COST SYSTEM ALSO RESULTS IN MORE ACCURATE BUDGETING AND BETTER PUBLIC REPORTING. BEGINNING WITH A DISCUSSION OF THE CLASSIFICATION PLAN FOR COST ACCOUNTS, THE TEXT THEN OUTLINES BASIC RECORDS AND PROCEDURES. DETAILED INFORMATION IS ALSO PRESENTED ON PROCEDURES FOR TIMEKEEPING, PAYMENT, ACCOUNTING FOR PERSONAL SERVICES AND ACCOUNTING FOR COMMODITIES ISSUED FROM STORES. EQUIPMENT DEPRECIATION AND THE PROBLEMS OF PROPERTY CONTROL ARE DISCUSSED. DISCUSSION ALSO FOCUSES ON THE SHARED COSTS, SUCH AS ELECTRICITY OR LAUNDRY, THAT MUST BE DISTRIBUTED TO DETERMINE THE PARTICULAR COSTS OF EACH UNIT OF THE INSTITUTION; AND THE MONTHLY COST LEDGER WHICH MUST BE RECONCILED WITH CONTROL RECORDS TO PROVE THAT THE PROPER AMOUNT OF WORK WAS DONE AND A COST REPORT PREPARED. PROBLEMS THAT AFFECT COST ACCOUNTING, ALTHOUGH NOT PART OF THE SYSTEM, ARE EXAMINED, INCLUDING PURCHASE AND STORAGE OF COMMODITIES AND PATIENTS' RECORDS. EXAMPLES FROM COST LEDGERS ARE PROVIDED, AND A MONTHLY COST REPORT FROM THE ELOISE HOSPITAL IS APPENDED. SAMPLE FORMS AND TABLES ARE INCLUDED. (MJM)