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St. Mark's Hospital contains 560 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 $43 per occupied bed per day, assuming a 30-day month. This $43 figure contains both variable and fixed cost elements. This average cost figure drops to $40 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 $557,920 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 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 bed-day Total expected 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.)

St. Mark's Hospital contains 560 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 $43 per occupied bed per day, assuming a 30-day month. This $43 figure contains both variable and fixed cost elements. This average cost figure drops to $40 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 $557,920 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 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 bed-day Total expected 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.)

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 25E: Lowell Manufacturing Inc. has a normal selling price of 20 per unit and has been selling 125,000...
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aw 11 St. Mark's Hospital contains 560 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 $43 per occupied bed per day, assuming a 30-day month. This $43 figure contains both variable and fixed cost elements. This average cost figure drops to $40 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 $557,920 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 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 bed-day Total expected costs 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.) pe here to search per month E W
Transcribed Image Text:aw 11 St. Mark's Hospital contains 560 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 $43 per occupied bed per day, assuming a 30-day month. This $43 figure contains both variable and fixed cost elements. This average cost figure drops to $40 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 $557,920 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 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 bed-day Total expected costs 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.) pe here to search per month E W
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