(AlCPA adapted) CVP analysis for a hospital The Columbus Hospital operates a general hospital but rents space and beds to separate entities for specialized areas such as pediatrics, maternity, etc. Columbus charges each entity for common services to its patients such as meals and laundry and for administrative services such as billings, collections, etc. All uncollectible accounts are charged directly to the entity. Space and bed rentals are fixed for the year.

For the entire year ended June 30, 1991, the pediatrics department at Columbus Hospital charged each patient an average of $195 per day, had a capacity of 60 beds, operated 24 hours per day for 365 days, and had revenue of $3,416,400. Expenses charged by the hospital to the pediatrics department were as follows:

The only personnel directly employed by the pediatrics department are supervising nurses, nurses, and aides. The hospital has minimum personnel requirements based on total annual patient days. Hospital professional staff level requirements beginning at the minimum, expected level of operation follow.

The staffing levels above represent full-time equivalents. Asume that the pediatrics depart- ment always employs only the minimum number of required full-time equivalent personnel.
Annual salaries for each class of employee follow: supervising nurses, $54,000; nurses, $39,000; and aides, $15,000. Salary expense for the year ended June 30,1991 for supervising nurses, nurses, and aides was $216,000, $507,000, and $330,000, respectively.
The pediatrics department operated at 100 percent capacity during 111 days for the past year. It is estimated that during 90 of these capacity days, the demand averaged 17 patients more than capacity and even went as high as 20 patients more on some days. The hospital has an additional 20 beds available for rent for the year ending June 30,1992.

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Dietary Janitorial. Laundry Laboratory, other than direct charges to patients Pharmacy Repairs and maintenance General administrative services Rent Billings and collections Bad debt expense. Other Totals Basis of Allocation Patient Days (variable) $128,856 Bed Capacity (fixed) $ 38,400 84,000 112,200 101,400 46,800 62,260 784,440 393,960 120,000 141,000 54,144 77,940 $788,400 $1,359,000