Melford Hospital operates a general hospital, but rents space and beds to separately owned entities rendering specialized services such as pediatrics and psychiatrics. Melford charges each separate entity for common services such as patients’ meals and laundry, and for administrative services such as billings and collections. Space and bed rentals are fixed charges for the year, based on bed capacity rented to each entity.

Melford charged the following costs to pediatrics for the year ended June 30, 19X2:: pg56 During the year ended June 30, 19X2, pediatrics charged each patient an average of $300 per day, had a capacity of 60 beds, and had revenue of $6,000,000 for 365 days.
In addition, pediatrics directly employed the following personnel:

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Annual salaries Supervising nurses $25,000 Nurses Aides 20,000 9.000 Melford has the following minimum departmental personnel requirements based on total annual patient days: Annual Supervising patient days Aides Nurses nurses Up to 21,900 20 21.901-26,000 26 13 26.001-29,200 30 15 935 10 4 4