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Linda_us, Finance, Accounts & Homework Tutor
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Experience:  Post Graduate Diploma in Management (MBA)
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Customer: replied 3 years ago.

1. General Hospital, a not for profit acute care facility, has the following cost structure for its inpatient services:
FIxed costs $10,0000,00
Variable cost per inpatient day $200
Charge (revenue) per in patient day $1,000
The hospital expects to have a patient load of $15,000 inpatient days next year.

a. Construct the hospital's base case projected P&L statement.
b. What is the hospital's breakeven point?
c. What volume is required to provide a profit of $1,000,000? A profit of $500,000?
d. Now assume that 20 percent of the hospital's inpatient days come from a managed care plan that wants a 25 percent discount from charges. Should the hospital agree to the discount proposal?

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Customer: replied 3 years ago.

I have one more question that I need help with. Can I give you the question with supplemental spread sheet and give you 70 for both?

Please post that as well.
Customer: replied 3 years ago.

St. Benedict’s Hospital has three support departments and four patient services departments.
The direct costs to each of the support departments are:
General Administration $2,000,000
Facilities 5,000,000
Financial Services 3,000,000

Selected data for the three support and four patient services departments are as follows:
Patient Space
Services (Square Housekeeping Salary
Department Revenue Feet) Labor Hours Dollars
General 10,000 2,000 $1,500,000
Facilities 20,000 5,000 3,000,000
Financial Services 15,000 3,000 2,000,000
Total 45,000 10,000 $6,500,000
Patient Services:
Routine Care $30,000,000 400,000 150,000 $12,000,000
Intensive Care 4,000,000 40,000 30,000 5,000,000
Diagnostic Services 6,000,000 60,000 15,000 6,000,000
Other Services 10,000,000 100,000 25,000 7,000,000
Total $50,000,000 600,000 220,000 $30,000,000
Grand total $50,000,000 645,000 230,000 $36,500,000

Assume that the hospital uses the direct method for cost allocation. Furthermore, the
cost driver for General Administration and Financial Services is patient services revenue,
while the cost driver for Facilities is space utilization.

a.What are the appropriate allocation rates?
b. Allocate the hospital’s overhead costs to the patient services departments.


Assignment 3.2: Week Three Review, Part 2

Problem 6.3


Patient Services Department

Support Department

Allocation Rate

Routine Care

Intensive care

Diagnostic Services

Other Services


General Admin














Financial Services







Total Indirect Costs







I am working on it. Will post the solution soon.
Customer: replied 3 years ago.

Attachment: 2013-03-31_192454_235669_1_cost-based-accounting.pdf


Here is a pdf of the statement... THANKS for your help!

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Customer: replied 3 years ago.

The allocation is the first first solution next to the title, correct?

I am not able to get what you are referring to.

Are you talking about " Allocation Rate for general administration"
Customer: replied 3 years ago.

Yes, gen admin, facilities, financial services...and so forth. The titles to the left

Let me recheck.
Yes they are correct. These amount are based on the initial data

The direct costs to each of the support departments are
General Administration $2,000,000
Facilities 5,000,000
Financial services 3,000,000

and they other figures are obatined from the selected data.
Customer: replied 3 years ago.

Ok, I am not sure if I did this correctly... please let me know if you received a total of $72.

The question was posted for $60. You need to add the remaining amount as Bonus.

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