What amount of total operating cost would you expect

Reference no: EM132676968

Problem - St. Mark's Hospital contains 500 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 $37 per occupied bed per day, assuming a 30-day month. This $37 figure contains both variable and fixed cost elements. This average cost figure drops to $34 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 $424,600 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.

b. Using the high-low method, estimate the 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?

Reference no: EM132676968

Questions Cloud

American productivity and quality center : Project Reviews. The American Productivity and Quality Center (APQC) suggests that all organizations include project reviews in their project management

Make the journal entry at the date of the bond purchase : On January 1, 2020, Kingbird Company purchased 9% bonds having a maturity value of $410,000, Make the journal entry at the date of the bond purchase

Features individuals high in openness-emotional stability : You are on a team which features individuals high in openness and emotional stability. What is the likely result of task conflict within your team? Why is this?

Module activity-individual preparedness planning : Where you are getting your information to inform your individual preparedness planning. What information could the field of public health provide you?

What amount of total operating cost would you expect : Assume an occupancy rate of 70% per month. What amount of total operating cost would you expect the hospital to incur

What is the appropriate accounting for the real estate : Lessor and Lessee enter into a seven-year lease for a small office building. What is the appropriate accounting for the real estate

Prepare the journal entry at December : Prepare the journal entry at December 31, 2020, and December 31, 2022, for Indigo related to these bonds

Allied universal-current management and leadership : Discuss the organization's background, history, financial position, along with current management and leadership.

What is the critical fractile : When we sell, at full retail, a unit of PB&J, we get a price of $100. It costs us $40 to acquire a unit of PB&J from our wholesaler, and a unit

User Account

All Pages