Managerial Accounting
16th Edition
ISBN: 9781259995484
Author: Ray Garrison
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 4.B, Problem 5P
PROBLEM 4B-5 Step-Down Method L04-11
Woodbury Hospital has three service departments and three operating departments. Estimated cost and operating data for all departments in the hospital for the forthcoming quarter are presented in the table below:
Service Departments
Operating Departments
| Housekeeping Services |
Food Services | Admin. Services | Laboratory | Radiology | General Hospital |
Total | |
| Total cost | $87,000 | $301,060 | $249,020 | $405,900 | $520,500 | $475,800 | $2,039,280 |
| Meals served | 800 | 2,000 | 1,000 | 68,000 | 71,800 | ||
| Square feet of space | 5.000 | 13,000 | 6,500 | 10,000 | 7,500 | 108,000 | 150,000 |
| Files processed | 14,000 | 7,000 | 25,000 | 46,000 |
The costs of the service departments are allocated by the step-down method using the allocation bases and in the order shown in the following table:
Service Department Allocation Bases Housekeeping Services Square feet of space Food Services Meals served Administrative Services Ales processed
All tilling in the hospital is done through Laboratory, Radiology or General Hospital. The hospital's administrator wants the costs of the three service departments allocated to these three billing centers.
Required:
Using the step-down method, prepare the cost allocation desired by the hospital administrator. Include under each billing center the direct costs of the center, as well as the costs allocated from the service department.
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H3.
Sacramento Memorial Hospital has the following financial data and operational metrics: Number of beds--> 250 Total inpatient stays--> 12,250 Total outpatient visits--> 90,754 Total patient revenues--> $111,900,050 Outpatient mix--> 16.2% Medicare payment percentage(revenues)--> 28.0% Average length of stay--> 5.8 days Net price per discharge--> $7,653 Cost per discharge--> $6,292 f. What is the hospital’s occupancy rate? (Hint: Start by calculating available bed days.)
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Extended Problem (2-36) Denison Specialty Hospital–Part I
Denison Specialty Hospital is planning its master budget for the coming year. The budget will include operating, capital, cash, and flexible budgets. The hospital is noted for its three fine programs: oncology (cancer), cardiac (heart), and rhinoplasty (nose jobs).
Section A
The managers at Denison have been busy working. They have reviewed past records and considered changes in competition, the general economy, and overall medical trends. Using past charges and anticipated rates of medical inflation, they have also made a first attempt at setting their prices.
Based on a thorough review and discussion of these data, they have projected that next year they will have 240 patients. They expect 120 oncology patients, 80 cardiac patients, and 40 rhinoplasty patients.
The charge, or list price, for oncology patients will average $50,000. Cardiac patients will be charged an average of $40,000, and rhinoplasty patients, $25,000.…
40. A facility’s budget shows the following data:
Patient days = 3,240
Total revenue = $6,450,000
Total expenses = $5,740,000
How would you calculate the operating margin?
a) (6,450,000/3,240) x 100
b) 5,740,000 / 6,450,000
c) [(6,450,000 – 5,740,000)/6,450,000] x 100
d) (5,740,000 / 6,450,000) x 100
Chapter 4 Solutions
Managerial Accounting
Ch. 4.A - EXERCISE 4A-1 Computation of Equivalent Units of...Ch. 4.A - EXERCISE 4A-2 Cost per Equivalent Unit-FIFO Method...Ch. 4.A - EXERCISE 4A-3 Assigning Costs to Units-FIFO Method...Ch. 4.A - EXERCISE 4A-4 Cost Reconciliation Report-EIFO...Ch. 4.A - EXERCISE 4A-5 Computation of Equivalent Units of...Ch. 4.A - EXERCISE 4A-6 Equivalent Units of Production-FIFO...Ch. 4.A - EXERCISE 4A-7 Equivalent Units of Production and...Ch. 4.A -
EXERCISE 4A-8 Equivalent Units of Production—FIFO...Ch. 4.A - EXERCISE 4A-9 Equivalent Units; Equivalent Units...Ch. 4.A - PROBLEM 4A-10 Equivalent Units of Production;...
Ch. 4.A - Prob. 11PCh. 4.A - Prob. 12CCh. 4.B - Prob. 1ECh. 4.B - EXERCISE 4B-2 Step-Down Method LO4-11 Madison Park...Ch. 4.B - Prob. 3ECh. 4.B - EXERCISE 4B-4 Direct Method LO4-10 Refer to the...Ch. 4.B - PROBLEM 4B-5 Step-Down Method L04-11 Woodbury...Ch. 4.B - PROBLEM 4B-6 Step-Down Method versus Direct...Ch. 4.B - CASE 4B-7 Step-Down Method versus Direct Method...Ch. 4 - Prob. 1QCh. 4 - In what ways are job-order and process costing...Ch. 4 - Why is cost accumulation simpler in a process...Ch. 4 - How many Work in Process accounts are maintained...Ch. 4 - Prob. 5QCh. 4 - Prob. 6QCh. 4 - Prob. 7QCh. 4 - Prob. 8QCh. 4 - Prob. 1AECh. 4 - This exercise relates to the Double Diamond Skis’...Ch. 4 - This exercise relates to the Double Diamond Skis’...Ch. 4 - Clopack Company manufactures one product that goes...Ch. 4 - Clopack Company manufactures one product that goes...Ch. 4 - Clopack Company manufactures one product that goes...Ch. 4 - Clopack Company manufactures one product that goes...Ch. 4 - Clopack Company manufactures one product that goes...Ch. 4 -
Clopack Company manufactures one product that...Ch. 4 -
Clopack Company manufactures one product that...Ch. 4 -
Clopack Company manufactures one product that...Ch. 4 - Clopack Company manufactures one product that goes...Ch. 4 - Prob. 10F15Ch. 4 - Prob. 11F15Ch. 4 - Prob. 12F15Ch. 4 -
Clopack Company manufactures one product that...Ch. 4 - Prob. 14F15Ch. 4 - Prob. 15F15Ch. 4 - Prob. 1ECh. 4 - Prob. 2ECh. 4 - Prob. 3ECh. 4 - EXERCISE 4-4 Assigning Costs to...Ch. 4 - EXERCISE 4-5 Cost Reconciliation...Ch. 4 - Prob. 6ECh. 4 - Prob. 7ECh. 4 - Prob. 8ECh. 4 -
EXERCISE 4-9 Equivalent Units and Cost per...Ch. 4 - Prob. 10ECh. 4 - Prob. 11ECh. 4 - Prob. 12ECh. 4 - Prob. 13PCh. 4 - Prob. 14PCh. 4 - Prob. 15PCh. 4 - PROBLEM 4-16 Comprehensive...Ch. 4 - Prob. 17PCh. 4 - Prob. 18PCh. 4 - Prob. 19CCh. 4 - (
CASE 4-20 Ethics and the Manager, Understanding...
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