Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

St. Mark's Hospital contains 490 beds. The occupancy rate varies between 60% and 90% per month, but the average occupancy rate is generally 80%.

image text in transcribedimage text in transcribed

St. Mark's Hospital contains 490 beds. The occupancy rate varies between 60% and 90% per month, but the average occupancy rate is generally 80%. In other words, on average, 80% of the hospital's beds are occupied by patients. At this level of occupancy, the hospital's operating costs are $36 per occupied bed per day, assuming a 30-day month. This $36 figure contains both variable and fixed cost elements. This average cost figure drops to $33 when the occupancy rate is 90% (typically during the months of July and August). During June, the hospital's occupancy rate was only 60% and a total of $404,060 in operating costs was incurred during the month. Required: 1-8. Using the high-low method, estimate the variable cost per occupied bed on a daily basis. (Round your answer to 3 decimal places.) Vanable cost + per bed-day 1-b. Using the high-low method, estimate the total fixed operating costs per month. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Total fixed operating costs per month Vanable cost per bed-day Check my work 1-b. Using the high-low method, estimate the total fixed operating costs per month. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Total fixed operating costs per month 2. Assume an occupancy rate of 70% per month. What amount of total operating cost would you expect the hospital to incur? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Total expected costs

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

South Western Federal Taxation 2017 Comprehensive

Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young

40th Edition

9781305874169

Students also viewed these Accounting questions