3-26 Hospital Breakeven (CPA) The Columbus Hospital operates a general hos- pital but rents space and beds to separate entities for specialized areas such as pediatrics, maternity, psychiatric, and so on. Columbus charges each separate entity for common services to its patients such as meals and laundry and for administrative services such as billings, collections, and so on. 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, 1973, the Pediatrics Department at Columbus Hospital charged each patient an average of $65 per day, had a capacity of 60 beds, operated 24 hours per day for 365 days, and had revenue of $1,138,800. Expenses charged by the hospital to the Pediatrics Department for the year ended June 30, 1973, were as follows:

BASIS OF ALLOCATION Patient Days Bed Capacity Dietary $ 42,952 Janitorial $ 12,800 Laundry 28,000 Laboratory, other than direct charges to patients 47,800 Pharmacy 33,800 Repairs and maintenance 5,200 7,140 General administrative services 131,760 Rent 275,320 Billings and collections 40,000 Bad debt expense 47,000 Other 18,048 25,980 $262,800 $453,000 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 requirements beginning at the minimum, expected level of operation follow.

ANNUAL PATIENT SUPERVISING DAYS AIDES NURSES NURSES 10,000-14,000 21 11 4 14,001-17,000 22 12 4 17,001-23,725 22 13 4 23,726-25,550 25 14 5 25,551-27,375 26 14 5 27,376-29,200 29 16 6 The staffing levels above represent full-time equivalents, and it should be assumed that the Pediatrics Department always employs only the minimum number of required full-time equivalent personnel.
Annual salaries for each class of employee follow: supervising nurses—
$18,000, nurses—$13,000, and aides—$5,000. Salary expense for the year ended June 30, 1973, for supervising nurses, nurses, and aides was $72,000, $169,000, and $110,000, 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, 1974.