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A. A hospital is analyzing its overhead costs. It is not clear whether the number of patient days or nursing hours would be the best cost driver to use in predicting the hospital's overhead. The latest information on the hospital is as follows: Month Hospital Nursing No. of Overhead Overhead Cost Overhead Hours Patient Cost Per Per Patient Costs Days Nursing Hr. Day July $965,000 51,000 8,000 $18.92 $120.63 August $1,000,000 53,000 9,000 $18.86 $111.11 September $830,000 38,000 8,750 $21.84 $ 94.86 October $925,000 43,000 7,000 $21.51 $132.14 November $1,100,000 65,000 12,000 $16.92 $ 91.67 December $900,000 42,000 7,900 $21.42 $113.92

A. A hospital is analyzing its overhead costs. It is not clear whether the number of patient days or nursing hours would be the best cost driver to use in predicting the hospital's overhead. The latest information on the hospital is as follows: Month Hospital Nursing No. of Overhead Overhead Cost Overhead Hours Patient Cost Per Per Patient Costs Days Nursing Hr. Day July $965,000 51,000 8,000 $18.92 $120.63 August $1,000,000 53,000 9,000 $18.86 $111.11 September $830,000 38,000 8,750 $21.84 $ 94.86 October $925,000 43,000 7,000 $21.51 $132.14 November $1,100,000 65,000 12,000 $16.92 $ 91.67 December $900,000 42,000 7,900 $21.42 $113.92

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 2MTC: The Two Cost Systems Sacred Heart Hospital (SHH) faces skyrocketing nursing costs, all of which...
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Using the high-low method, determine the hospital's variable cost per nursing hour, rounded to two decimal places.
Transcribed Image Text:Using the high-low method, determine the hospital's variable cost per nursing hour, rounded to two decimal places.
A. A hospital is analyzing its overhead costs. It is not clear whether the number of patient days or nursing hours would be the best cost driver to use in predicting the hospital's overhead. The latest information on the hospital is as follows: Month Hospital Nursing No. of Overhead Overhead Cost Overhead Hours Patient Cost Per Per Patient Costs Days Nursing Hr. Day July $965,000 51,000 8,000 $18.92 $120.63 August $1,000,000 53,000 9,000 $18.86 $111.11 September $830,000 38,000 8,750 $21.84 $ 94.86 October $925,000 43,000 7,000 $21.51 $132.14 November $1,100,000 65,000 12,000 $16.92 $ 91.67 December $900,000 42,000 7,900 $21.42 $113.92
Transcribed Image Text:A. A hospital is analyzing its overhead costs. It is not clear whether the number of patient days or nursing hours would be the best cost driver to use in predicting the hospital's overhead. The latest information on the hospital is as follows: Month Hospital Nursing No. of Overhead Overhead Cost Overhead Hours Patient Cost Per Per Patient Costs Days Nursing Hr. Day July $965,000 51,000 8,000 $18.92 $120.63 August $1,000,000 53,000 9,000 $18.86 $111.11 September $830,000 38,000 8,750 $21.84 $ 94.86 October $925,000 43,000 7,000 $21.51 $132.14 November $1,100,000 65,000 12,000 $16.92 $ 91.67 December $900,000 42,000 7,900 $21.42 $113.92
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