Chapter 1, Problem 4MAD

A.

To determine

Compute the number of in-patient days for each month.

Answer to Problem 4MAD

The number of in-patient days for the month of April, May and June are 5,760, 6,510 and 6,750 in-patients days respectively.

Explanation of Solution

Managerial accounting: Managerial accounting is the process of identifying, measuring, analyzing, interpreting, and communicating the information, which is designed to meet the goals of the organization.

Determine the in-patient days for the month of April.

    $\begin{array}{c}\begin{array}{l}\text{In}-\text{patient}\\ \text{days for April}\end{array}\}\text{= Patients admitted×Average length of stay per patients}\\ \text{=1,440×4}\text{.0}\\ \text{=5,760}\end{array}$

Determine the in-patient days for the month of May.

    $\begin{array}{c}\begin{array}{l}\text{In}-\text{patient}\\ \text{days for May}\end{array}\}\text{= Patients admitted×Average length of stay per patients}\\ \text{=1,860×3}\text{.5}\\ \text{=6,510}\end{array}$

Determine the in-patient days for the month of June.

    $\begin{array}{c}\begin{array}{l}\text{In}-\text{patient}\\ \text{days for June}\end{array}\}\text{= Patients admitted×Average length of stay per patients}\\ \text{=2,250×3}\text{.0}\\ \text{=6,750}\end{array}$

B.

To determine

Compute the available bed days rate for each month.

Answer to Problem 4MAD

• • The total available beds including both the private and semi private rooms are $\left(\text{100 + 200}\right)$300 rooms.
• • The available bed day’s rates for the month April, May and June are 9,000, 9,300 and 9,000 bed days respectively.

Explanation of Solution

Determine the beds available for private rooms.

    $\begin{array}{c}\begin{array}{l}\text{Available beds for}\\ \text{private rooms}\end{array}\}\text{=}\left(\text{Number of rooms}\times \text{ Beds per room }\right)\\ =100\times 1\\ =100\end{array}$

Determine the beds available for semi-private rooms.

    $\begin{array}{c}\begin{array}{l}\text{Available beds for}\\ \text{semi}-\text{private rooms}\end{array}\}\text{=}\left(\text{Number of rooms}\times \text{ Beds per room }\right)\\ =200\times 1\\ =200\end{array}$

Determine the available bed days for the month of April.

    $\begin{array}{c}\begin{array}{l}\text{Available bed days}\\ \text{for April}\end{array}\}\text{=}\left(\text{Bed}\text{capacity × Days in April}\right)\\ \text{=300 × 30}\\ \text{=9,000}\end{array}$

Determine the available bed days for the month of May.

    $\begin{array}{c}\begin{array}{l}\text{Available bed days}\\ \text{for May}\end{array}\}\text{=}\left(\text{Bed}\text{capacity × Days in May}\right)\\ \text{=300 × 31}\\ \text{=9,300}\end{array}$

Determine the available bed days for the month of June.

    $\begin{array}{c}\begin{array}{l}\text{Available bed days}\\ \text{for June}\end{array}\}\text{=}\left(\text{Bed}\text{capacity × Days in June}\right)\\ \text{=300 × 30}\\ \text{=9,000}\end{array}$

C.

To determine

Compute the occupancy rate for the month of April, May, June.

Answer to Problem 4MAD

The occupancy rates for Hospital V SS for the month of April, May and June are 64%, 70 and 75% respectively.

Explanation of Solution

Determine the occupancy rate for the month of April.

    $\begin{array}{c}\text{Occupancy rate=}\frac{\text{In-patient days [A]}}{\text{Available bed days [B]}}\text{×100}\\ \text{=}\frac{\text{5,760}}{\text{9,000}}\text{×100}\\ \text{=64\%}\end{array}$

Determine the occupancy rate for the month of May.

    $\begin{array}{c}\text{Occupancy rate=}\frac{\text{In-patient days [A]}}{\text{Available bed days [B]}}\text{×100}\\ \text{=}\frac{\text{6,510}}{\text{9,300}}\text{×100}\\ \text{=70\%}\end{array}$

Determine the occupancy rate for the month of June.

    $\begin{array}{c}\text{Occupancy rate=}\frac{\text{In-patient days [A]}}{\text{Available bed days [B]}}\text{×100}\\ \text{=}\frac{\text{6,750}}{\text{9,000}}\text{×100}\\ \text{=75\%}\end{array}$

D.

To determine

Interpret the results in (C).

Explanation of Solution

By interpreting the results in (C), it is found that the occupancy rate has been increased from April to May, and again increased from May to June. From the three months data it is found that the number of admission is increasing, while the average length of stay is decreasing. This decline in the average length of stay can be due to the greater efficiency in the treatment, assuming no changes in the treatment mix. Thereby, due to the reduced length of stay and greater occupancy, the hospital can accept more patients each month.