Answered step by step
Verified Expert Solution
Question
1 Approved Answer
St. Mark's Hospital contains 580 beds. The occupancy rate varies between 60% and 90% per month, but the average occupancy rate is generally 80%. In
St. Mark's Hospital contains 580 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 $45 per occupied bed per day, assuming a 30-day month. This $45 figure contains both variable and fixed cost elements. This average cost figure drops to $42 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 $606,200 in operating costs was incurred during the month. Required: 1-a. Using the high-low method, estimate the variable cost per occupied bed on a daily basis. (Round your answer to 3 decimal places.) Variable 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 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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started